Rocket Firms Broadcasts First Quarter Outcomes

• Generated Q1 internet income of $2.7 billion and Adjusted Income of $1.9 billion¹
• Delivered Q1 internet revenue of $1.0 billion and Adjusted Internet Earnings of $293 million¹
• Achieved greatest Q1 buy and cash-out refinance originations in Rocket Firms’ historical past

DETROIT, Could 10, 2022 /PRNewswire/ — Rocket Firms, Inc. (NYSE: RKT) (“Rocket Firms” or the “Firm”), a Detroit-based FinTech platform firm consisting of tech-driven actual property, mortgage and monetary companies companies – together with Rocket Mortgage, Rocket Properties, Truebill and Rocket Auto – immediately introduced outcomes for the quarter ended March 31, 2022.

“Rocket delivered a stable efficiency within the first quarter and achieved our greatest Q1 quantity in buy and money out refinances, whilst charges rose quickly. Now, as we transfer additional into the 12 months, we’ll efficiently navigate the mortgage and actual property headwinds by defending our margin and profitability whereas persevering with to put money into strategic areas similar to know-how, partnerships and efficiency advertising to develop share and broaden our enterprise for the long run,” mentioned Jay Farner, Vice Chairman and CEO of Rocket Firms.

First Quarter Monetary Abstract¹

First Quarter Monetary Highlights

Through the first quarter of 2022:

• Generated complete income, internet of $2.7 billion and Adjusted Income of $1.9 billion, which represents a 41% and a 52% decline in comparison with Q1’21 ranges, respectively.  
• Rocket Mortgage generated $54.0 billion in mortgage origination closed mortgage quantity. Achieve on sale margin was 3.01% and included one-time advantages as a result of speedy transfer in bond markets, which elevated achieve on sale margin by 15 foundation factors.
• Generated internet revenue of $1.0 billion and Adjusted Internet Earnings of $293 million. Our internet revenue margin was 39% and our Adjusted Internet Earnings margin was 15%.
• Achieved Adjusted EBITDA of $450 million and Adjusted EBITDA margin was 23%.
• Grew servicing guide unpaid principal stability to $546 billion at March 31, 2022, roughly flat from December 31, 2021 and up 17% from March 31, 2021. As of March 31, 2022, our servicing portfolio consists of 2.6 million shoppers and generates over $1.4 billion of recurring servicing payment revenue on an annualized foundation.

Firm Highlights

Rocket Platform

• Rocket Mortgage achieved its greatest Q1 buy and cash-out refinance closed mortgage quantity in firm historical past in Q1 ’22. Our buy quantity grew 43% over Q1’21 ranges, pushed by our concentrate on a superior, technology-driven consumer expertise, product innovation and our built-in, end-to-end house shopping for ecosystem.
• Rocket Mortgage internet consumer retention price was 92% over the 12 months ended March 31, 2022. There’s a robust correlation between this metric and consumer lifetime worth, and we consider our internet consumer retention price is unmatched amongst mortgage corporations and on par with among the greatest performing subscription enterprise fashions on the planet.
• Rocket Properties drove a primary quarter report of 8,200 actual property transactions and $2 billion of actual property transaction worth throughout Q1 ’22, representing the worth of properties bought and offered by means of our actual property agent community.
• Rocket Auto, our automotive retail market, generated a primary quarter report of $445 million in gross merchandise worth² in Q1 ’22, up $85 million, or 24% from Q1 ’21.
• Truebill, the main private finance app that we acquired in December 2021, and helps shoppers handle their whole monetary lives, elevated its member base to three.4 million in Q1’22, up 142% from Q1 ’21. Of the three.4 million members, 1.7 million are premium paying members, up greater than double from Q1 ’21.
• Rocket Photo voltaic at the moment facilitates transactions in 27 main markets throughout 9 states, together with Arizona, Florida and South Carolina. A full public launch is slated for June 2022.
• Rocket Firms ranked #7 on Fortune’s ‘100 Greatest Firms to Work For’ listing. This marks the nineteenth consecutive 12 months the Firm has ranked within the high 30 of this prestigious listing.

Expertise and Product

• As of March 31, 2022, roughly 85,000 actual property brokers have signed up for Rocket Professional Perception (RPI), up from roughly 80,000 on December 31, 2021. RPI is our digital platform for actual property brokers to handle your entire mortgage course of in real-time, from utility submission to closing. 
• In April, Rocket Professional TPO launched the Quick 15 program, which ensures 15 enterprise days to shut for eligible buy loans. This dedication underscores the boldness we’ve in our means to shut buy loans and provides shoppers certainty within the house shopping for expertise.

Supporting Our Communities

• Rocket Mortgage introduced its first partnership with a Main League Baseball Workforce because the Unique Mortgage Accomplice of the Detroit Tigers. Via this effort, Rocket Mortgage and the Detroit Tigers are teaming as much as help Join 313 to assist finish the digital divide in Detroit.
• Rocket Neighborhood Fund, a associate firm, and the Gilbert Household Basis not too long ago launched the Motor Metropolis Contractor Fund, a $10 million pilot program that goals to supply low-interest loans and know-how and enterprise advisory companies to make sure that Black, indigenous individuals and different individuals of coloration who’re contractors have fairness in entry to technical help and capital.

Subsequent to March 31, 2022:  

• As of Could 6, 2022, Rocket Firms repurchased 25.3 million shares cumulatively at a median worth of $14.16. In complete, we’ve returned $359 million to Class A standard stockholders beneath the $1 billion share repurchase program licensed in November 2020.
• Fitch not too long ago positioned our subsidiary, Rocket Mortgage, on constructive outlook with a BB+ score. A constructive outlook signifies an upward development with a view that the score could also be raised within the subsequent twelve to eighteen months to funding grade. Each Fitch and Moody’s now view Rocket Mortgage as a possible funding grade firm.

Second Quarter 2022 Outlook

We anticipate the next ranges in Q2 2022:

• Closed mortgage quantity of between $35 billion and $40 billion.
• Internet price lock quantity of between $31 billion and $38 billion.
• Achieve on sale margins of two.60% to 2.90% 

Direct to Shopper

Within the Direct to Shopper phase, shoppers have the power to work together with Rocket Mortgage on-line and/or with the Firm’s mortgage bankers. The Firm markets to potential shoppers on this phase by means of numerous model campaigns and efficiency advertising channels. The Direct to Shopper phase derives income from originating, closing, promoting and servicing predominantly agency-conforming loans, that are pooled and offered to the secondary market. The phase additionally consists of title insurance coverage, value determinations and settlement companies complementing the Firm’s end-to-end mortgage origination expertise. Servicing actions are absolutely allotted to the Direct to Shopper phase and are considered as an extension of the consumer expertise. Servicing allows Rocket Mortgage to determine and preserve long run relationships with our shoppers, by means of a number of touchpoints at common engagement intervals.

Accomplice Community

The Rocket Skilled platform helps our Accomplice Community phase, the place we leverage our superior consumer service and widely known model to develop advertising and influencer relationships, and our mortgage dealer partnerships by means of Rocket Professional TPO. Our advertising partnerships include well-known consumer-focused corporations that discover worth in our award-winning consumer expertise and need to supply their shoppers mortgage options with our trusted, widely known model. These organizations join their shoppers on to us by means of advertising channels and a referral course of. Our influencer partnerships are sometimes with corporations that make use of licensed mortgage professionals that discover worth in our consumer expertise, know-how and environment friendly mortgage course of, the place mortgages might not be their main providing. We additionally allow shoppers to start out the mortgage course of by means of the Rocket platform in the best way that works greatest for them, together with by means of an area mortgage dealer.

Steadiness Sheet and Liquidity

We stay in a powerful liquidity place, with complete liquidity of $7.7 billion, which incorporates $2.3 billion of money on-hand, $2.1 billion of company money used to self-fund mortgage originations, a portion of which might be transferred to funding services (warehouse traces) at our discretion, $3.1 billion of undrawn traces of credit score from non-funding services, and $0.2 billion of undrawn MSR traces. As of March 31, 2022, our out there money place was $4.4 billion, which incorporates money on-hand and company money used to self-fund mortgage originations, mixed with the $6.4 billion of mortgage servicing rights, representing a complete of $10.8 billion {dollars} of asset worth on our stability sheet. As of March 31, 2022, our complete fairness was $8.7 billion and displays the impression of the particular dividend of $1.01 that was paid throughout the quarter to Class A shareholders and funded by means of a $2.0 billion distribution.

First Quarter and Full 12 months Earnings Name

Rocket Firms will host a reside convention name at 4:30 p.m. ET on Could 10, 2022 to debate its outcomes for the quarter ended March 31, 2022. A reside webcast of the occasion will probably be out there on-line by clicking on the “Investor Information” part of our web site. The webcast will even be out there by way of rocketcompanies.com.

A replay of the webcast will probably be out there on the Investor Relations web site following the conclusion of the occasion. If you’re having points viewing the webcast, please see the occasion assist information on the hyperlink right here.

Non-GAAP Monetary Measures

To supply traders with data along with our outcomes as decided by GAAP, we disclose Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA as non-GAAP measures which administration believes present helpful data to traders. These measures should not monetary measures calculated in accordance with GAAP and shouldn’t be thought of as an alternative choice to income, internet revenue, or some other working efficiency measure calculated in accordance with GAAP, and might not be corresponding to a equally titled measure reported by different corporations.

We outline “Adjusted Income” as complete revenues internet of the change in honest worth of mortgage servicing rights (“MSRs”) attributable to valuation assumptions (internet of hedges). We outline “Adjusted Internet Earnings” as tax-effected earnings earlier than share-based compensation expense, the change in honest worth of MSRs attributable to valuation assumptions (internet of hedges), loss on extinguishment of Senior Notes, a litigation accrual, Change in Tax receivable settlement legal responsibility, and the tax results of these changes. We outline “Adjusted Diluted EPS” as Adjusted Internet Earnings divided by the diluted weighted common variety of Class A standard inventory excellent for the relevant interval, which assumes the professional forma change and conversion of all excellent Class D widespread inventory for Class A standard inventory. We outline “Adjusted EBITDA” as earnings earlier than curiosity and amortization expense on non-funding debt, revenue tax, and depreciation and amortization, internet of the change in honest worth of MSRs attributable to valuation assumptions (internet of hedges), share-based compensation expense, and a litigation accrual. We exclude from every of those non-GAAP measures the change in honest worth of MSRs attributable to valuation assumptions (internet of hedges) as this represents a non-cash non-realized adjustment to our complete revenues, reflecting modifications in assumptions together with low cost charges and prepayment velocity assumptions, principally attributable to modifications in market rates of interest, which isn’t indicative of our efficiency or outcomes of operation. We additionally exclude results of contractual prepayment safety related to gross sales of MSRs. Adjusted EBITDA consists of Curiosity expense on funding services, that are recorded as a element of Curiosity revenue, internet, as these bills are a direct value pushed by mortgage origination quantity. In contrast, curiosity and amortization expense on non-funding debt is a operate of our capital construction and is subsequently excluded from Adjusted EBITDA.

Within the first quarter of 2022, we revised our definition of Adjusted Internet revenue and Adjusted EBITDA to additionally exclude the money portion of share-based compensation bills, as these bills don’t instantly have an effect on what we think about to be our core working efficiency. Comparative durations offered to the extent impacted have been up to date. On occasion sooner or later, we might exclude different objects if we consider that doing so is per the aim of offering helpful data to traders.

We consider that the presentation of Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA gives helpful data to traders relating to our outcomes of operations as a result of every measure assists each traders and administration in analyzing and benchmarking the efficiency and worth of our enterprise. Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA present indicators of efficiency that aren’t affected by fluctuations in sure prices or different objects. Accordingly, administration believes that these measurements are helpful for evaluating basic working efficiency from interval to interval, and administration depends on these measures for planning and forecasting of future durations. Moreover, these measures enable administration to check our outcomes with these of different corporations which have completely different financing and capital constructions. Nevertheless, different corporations might outline Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA otherwise, and because of this, our measures of Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA might not be instantly corresponding to these of different corporations.

Though we use Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA as monetary measures to evaluate the efficiency of our enterprise, such use is restricted as a result of they don’t embrace sure materials prices essential to function our enterprise. Moreover, our definitions of every of Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA permits us so as to add again sure non-cash costs and deduct sure beneficial properties which can be included in calculating Whole revenues, internet, Internet revenue attributable to Rocket Firms or Internet revenue. Nevertheless, these bills and beneficial properties fluctuate vastly, and are tough to foretell. They’ll characterize the impact of long-term methods versus short-term outcomes. Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA ought to be thought of along with, and never as an alternative choice to, Whole revenues, internet, Internet revenue attributable to Rocket Firms and Internet revenue in accordance with U.S. GAAP as measures of efficiency. Our presentation of Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA shouldn’t be construed as a sign that our future outcomes will probably be unaffected by uncommon or nonrecurring objects.

Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA have limitations as analytical instruments, and you shouldn’t think about them in isolation or as an alternative choice to evaluation of our outcomes as reported beneath U.S. GAAP. A few of these limitations are: (a) they don’t mirror each money expenditure, future necessities for capital expenditures or contractual commitments; (b) Adjusted EBITDA doesn’t mirror the numerous curiosity expense or the money necessities essential to service curiosity or principal fee on our debt; (c) though depreciation and amortization are non-cash costs, the belongings being depreciated and amortized will typically have to get replaced or require enhancements sooner or later, and Adjusted Income, Adjusted Internet Earnings and Adjusted EBITDA don’t mirror any money requirement for such replacements or enhancements; and (d) they don’t seem to be adjusted for all non-cash revenue or expense objects which can be mirrored in our Condensed Consolidated Statements of Money Flows.

Due to these limitations, Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA should not supposed as alternate options to Whole income, internet, Internet revenue attributable to Rocket Firms or Internet revenue as an indicator of our working efficiency and shouldn’t be thought of as measures of discretionary money out there to us to put money into the expansion of our enterprise or as measures of money that will probably be out there to us to fulfill our obligations. We compensate for these limitations through the use of Adjusted Income, Adjusted Internet Earnings, Adjusted Diluted EPS and Adjusted EBITDA together with different comparative instruments, along with U.S. GAAP measurements, to help within the analysis of working efficiency.

Ahead Trying Statements

A number of the statements contained on this doc are forward-looking statements throughout the that means of Part 27A of the Securities Act of 1933, as amended, and Part 21E of the Securities Alternate Act of 1934, as amended. These forward-looking statements are usually recognized by means of phrases similar to “anticipate,” “consider,” “may,” “estimate,” “anticipate,” “intend,” “might,” “plan,” “potential,” “predict,” “undertaking,” “ought to,” “goal,” “will,” “would” and, in every case, their damaging or different numerous or comparable terminology. These forward-looking statements mirror our views with respect to future occasions as of the date of this doc and are primarily based on our administration’s present expectations, estimates, forecasts, projections, assumptions, beliefs and knowledge. Though administration believes that the expectations mirrored in these forward-looking statements are affordable, it may give no assurance that these expectations will show to have been appropriate. All such forward-looking statements are topic to dangers and uncertainties, lots of that are outdoors of our management, and will trigger future occasions or outcomes to be materially completely different from these said or implied on this doc. It’s not potential to foretell or establish all such dangers. These dangers embrace, however should not restricted to, the chance elements which can be described beneath the part titled “Threat Components” in our Annual Report on Type 10-Ok, Quarterly Experiences on Type 10-Q, Present Experiences on Type 8-Ok, and different filings with the Securities and Alternate Fee. These elements shouldn’t be construed as exhaustive and ought to be learn at the side of the opposite cautionary statements which can be included on this doc and in our SEC filings. We expressly disclaim any obligation to publicly replace or evaluate any forward-looking statements, whether or not because of new data, future developments or in any other case, besides as required by relevant regulation.

About Rocket Firms

Rocket Firms is a Detroit-based FinTech platform firm consisting of private finance and shopper know-how manufacturers together with Rocket Mortgage, Rocket Properties, Amrock, Rocket Auto, Rocket Loans, Truebill, Lendesk, Edison Monetary, Core Digital Media, Rocket Central and Rock Connections.

Since 1985, Rocket Firms has been obsessive about serving to its shoppers obtain the American dream of house possession and monetary freedom. The Firm affords industry-leading consumer experiences powered by its easy, quick and trusted digital options. Rocket Firms ranked #7 on Fortune’s listing of the “100 Greatest Firms to Work For” in 2022 and has positioned within the high third of the listing for 19 consecutive years. For extra data, please go to our Company Web site or Investor Relations Web site.

¹ “GAAP” stands for Typically Accepted Accounting Rules within the U.S. Please see the sections of this doc titled “Non-GAAP Monetary Measures” and “GAAP to non-GAAP Reconciliations” for extra data on the Firm’s non-GAAP measures and its share rely. Sure figures within the tables all through this doc might not foot attributable to rounding.

² Gross merchandise worth consists of the gross sales worth of automobiles offered plus vehicle-related product gross sales that have been generated throughout the interval.

³ We measure the efficiency of the Direct to Shopper and Accomplice Community segments totally on a contribution margin foundation. Contribution margin is meant to measure the direct profitability of every phase and is calculated as Adjusted Income much less instantly attributable bills. Straight attributable bills embrace salaries, commissions and staff member advantages, basic and administrative bills, and different bills, similar to direct servicing prices and origination prices. A mortgage is taken into account “offered” when it’s offered to traders on the secondary market. We beforehand referred to “offered” loans as “funded” loans. See “Abstract Section Outcomes” part later on this doc and the footnote on “Segments” within the “Notes to Consolidated Monetary Statements” within the Firm’s forthcoming submitting on Type 10-Q for extra data.

SOURCE Rocket Firms, Inc.