Rocket Companies delivered a quarter that exceeded Wall Street’s expectations, with management crediting its results to improved operational efficiency, strong execution on seasonal promotions, and robust growth in home equity lending. CEO Varun Krishna highlighted a significant uptick in home equity loan volume, stating, “Home equity loans, which help homeowners tap record levels of home equity without impacting their first lien, continues to attract new customers to Rocket.” The company’s use of artificial intelligence (AI) in streamlining underwriting and client engagement was cited as a key contributor to productivity gains and the ability to flex operations during periods of heightened demand. These initiatives, alongside the expansion of digital refinancing and continued focus on affordability programs, were central to navigating a challenging housing market.
Is now the time to buy RKT? Find out in our full research report (it’s free).
Rocket Companies (RKT) Q2 CY2025 Highlights:
- Revenue: $1.36 billion vs analyst estimates of $1.29 billion (10.8% year-on-year growth, 5.8% beat)
- Adjusted EPS: $0.04 vs analyst estimates of $0.03 ($0.01 beat)
- Adjusted EBITDA: $172 million vs analyst estimates of $106 million (12.6% margin, 62.3% beat)
- Revenue Guidance for Q3 CY2025 is $1.68 billion at the midpoint, above analyst estimates of $1.57 billion
- Market Capitalization: $38.45 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Rocket Companies’s Q2 Earnings Call
- Lucas Haimes (Goldman Sachs) asked about the outlook for Q3 expenses and future cost discipline. CFO Brian Brown explained that Redfin integration and nonrecurring items drive temporary expense increases, but underlying cost actions should yield meaningful savings by Q4.
- Bose George (KBW) questioned the approach to mortgage servicing rights (MSR) hedging post-Mr. Cooper acquisition. Brown responded that Rocket will maintain Cooper’s hedging practices initially and adjust based on realized recapture data.
- Mark DeVries (Deutsche Bank) inquired about early Redfin integration outcomes and synergy realization. CEO Varun Krishna cited rapid co-branding and new client flows, while Brown emphasized visible expense synergies and strong early lead creation.
- Ryan McKeveny (Zelman) asked about Redfin’s agent count and the broader purchase strategy. Krishna outlined plans to leverage both in-house and partner agent networks, supported by Redfin’s consumer traffic and Rocket’s scalable platform.
- Douglas Harter (UBS) sought insight on MSR acquisition appetite and the impact of AI on long-term expense trends. Brown and Krishna described a disciplined, opportunistic MSR strategy and projected “geometric” improvements in operational scalability from AI.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) tangible revenue and conversion gains from the Redfin integration, (2) evidence that AI investments continue to drive cost efficiencies and client acquisition at scale, and (3) progress toward closing and integrating the Mr. Cooper acquisition. Monitoring the effectiveness of home equity products and the resilience of purchase demand in a shifting housing market will also be important indicators of execution.
Rocket Companies currently trades at $18.25, up from $14.77 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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