Rocket Exceeds Revenue Expectations in Q3

Rocket Companies released its Q3 2021 earnings report, which showed its earnings bested expectations of analysts, despite a serious dip in refinancing activity.

Analysts expected Rocket to close out the quarter at 48 cents per share, but the company came out on top at 57 cents per share, an adjusted net income of $1.14 billion. Its adjusted revenue reached $3.2 billion, well above consensus estimates of $2.96 billion. The company’s total revenue rose 96% from Q3 2019.

“We had an excellent third quarter, as we executed on our mission to remove friction from life’s complex moments. Our core mortgage business exceeded the high end of guidance for closed loan volume and gain-on-sale margin while achieving record purchase volume,” Rocket CEO Jay Farner said in a statement. 

Rocket is now on track to increase its mortgage market share from 8% in 2020 to 9.5% by the end of 2021.

High closed loan volume and gain-on-sale margins pushed the company’s final numbers above analyst estimates, reaching $88 billion and 3.05%, respectively. Purchase volume specifically grew 70% year-over-year (YOY).

Farner said Rocket expects to exceed a 10% share in the mortgage market in 2022, citing the company’s recent partnership with Salesforce. Rocket has said the partnership is meant to expand the company’s market share by making its origination technology available as an end-to-end “mortgage-as-a-service” product. 

The service will be available to lenders with licensed mortgage loan officers through Salesforce Financial Services Cloud. Rocket expects it to benefit banks and credit unions without mortgage processes in place.

“We are projecting to go north of 10% market share,” Farner said. “We have been consistently growing market share, regardless of the size of the pie.”

Farner noted that the company plans to grow its other business, especially real estate, auto, personal loans, and rooftop solar installation.

Its move into solar, which the company announced in August, has been characterized as “unusual.” The new program is in a test phase but the company said it plans to expand “with the launch of a full-scale, public-facing solution, including financing through Rocket Loans, in the first half of 2022.”

Less than 5% of eligible homes in the U.S. have rooftop solar panels. But demand is growing, and a study from the Solar Energy Industries Association and Wood Mackenzie has predicted the market will quadruple by 2030.