10-KPeriod: FY2021

Rocket Companies, Inc. Annual Report, Year Ended Dec 31, 2021

Filed March 1, 2022For Securities:RKT

Summary

Rocket Companies, Inc. (RKT) reported its full-year 2021 financial results in this 10-K filing. The company experienced a significant increase in mortgage loan origination volume, up 9.7% year-over-year, reaching $351.2 billion. Despite this volume growth, net income decreased to $6.1 billion from $9.4 billion in 2020, primarily due to a reduction in the gain on sale margin. Adjusted EBITDA also saw a substantial decline of 44.9% year-over-year. Rocket Companies continues to diversify its business beyond mortgages, with expanding operations in real estate services (Amrock), personal lending (Rocket Loans), auto sales (Rocket Auto), and personal finance (Truebill acquisition in late 2021). The company emphasizes its technology-driven platform and client experience as key differentiators in a competitive market. However, it faces significant risks related to interest rate volatility, regulatory changes, cybersecurity threats, and intense competition within the financial services industry.

Financial Highlights

37 data points
Beta

Net Income

$308.21M

EPS (Diluted)

$2.32

Total Assets

$32.77B

Cash & Equivalents

$2.13B

Free Cash Flow

$7.63B

Financial Statements
Beta
Gross Profit$8.26B
Operating Expenses$6.73B
Net Income$308.21M
EPS (Basic)$2.36
EPS (Diluted)$2.32
Shares Outstanding (Basic)130.58M
Shares Outstanding (Diluted)1.99B

Key Highlights

  • 1Mortgage origination volume increased by 9.7% to $351.2 billion in 2021, compared to $320.2 billion in 2020.
  • 2Net income decreased by 35.2% to $6.1 billion in 2021, down from $9.4 billion in 2020.
  • 3Adjusted EBITDA fell by 44.9% to $6.2 billion in 2021, compared to $11.2 billion in 2020.
  • 4Gain on sale of loans, net decreased by 30.5% to $10.5 billion in 2021, driven by lower gain on sale margins.
  • 5The company repurchased $187.7 million of its common stock during the fourth quarter of 2021, with $768.4 million remaining available under its $1 billion repurchase program.
  • 6Rocket Companies completed the acquisition of Truebill, Inc. in late 2021 for approximately $1.2 billion, expanding its personal finance offerings.
  • 7The servicing portfolio grew, with total serviced UPB (Unpaid Principal Balance) reaching $551.9 billion as of December 31, 2021.

Frequently Asked Questions

For the year ended December 31, 2021, Rocket Companies reported a net income of $6.1 billion and originated $351.2 billion in residential mortgage loans. This represents a decrease in net income from $9.4 billion in 2020 but an increase in origination volume from $320.2 billion in 2020.

The primary driver for the decrease in net income and Adjusted EBITDA was a significant reduction in the gain on sale margin, which fell by 30.5% in 2021. This compression in margins, despite higher origination volumes, impacted overall profitability. Additionally, the company saw an increase in operating expenses, including marketing and advertising, salaries, and general administrative costs, to support higher production levels and strategic initiatives.

Rocket Companies is actively diversifying by expanding into complementary industries. This includes its real estate services through Amrock, personal lending via Rocket Loans, automotive retail through Rocket Auto, solar energy financing with Rocket Solar, and personal finance management with the recent acquisition of Truebill. These expansions aim to leverage the core Rocket platform and brand to provide a comprehensive suite of client solutions.

The company faces several key risks, including the impact of interest rate changes on its business, intense competition in the financial services sector, cybersecurity threats and data breaches, the need to adapt to technological changes, and regulatory and legal compliance. The COVID-19 pandemic also continues to be cited as a risk factor affecting operations.