10-QPeriod: Q2 FY2021

Rocket Companies, Inc. Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 13, 2021For Securities:RKT

Summary

Rocket Companies, Inc. (RKT) reported its financial results for the quarter ending June 30, 2021. Total revenue for the quarter was $2.67 billion, a decrease from $5.04 billion in the same period of the prior year. Net income attributable to Rocket Companies was $61.1 million, significantly down from $0 in the prior year quarter, primarily due to a substantial decrease in the gain on sale of loans. Despite the year-over-year decline in net income and revenue, the company saw an increase in mortgage loan origination volume for both the quarter and the year-to-date period. However, the gain on sale margin compressed due to tighter spreads between primary and secondary mortgage rates and a shift in the mix towards the Partner Network segment. The company's balance sheet remains robust, with total assets of $35.6 billion and total liabilities of $27.4 billion as of June 30, 2021.

Financial Highlights

34 data points
Beta

Net Income

$61.12M

EPS (Diluted)

$0.40

Total Assets

$35.62B

Cash & Equivalents

$1.97B

Free Cash Flow

-$3.75B

Financial Statements
Beta
Gross Profit$1.53B
Operating Expenses$1.61B
Net Income$61.12M
EPS (Basic)$0.45
EPS (Diluted)$0.40
Shares Outstanding (Basic)136.14M
Shares Outstanding (Diluted)1.99B

Key Highlights

  • 1Total revenue for Q2 2021 was $2.67 billion, down from $5.04 billion in Q2 2020.
  • 2Net income attributable to Rocket Companies was $61.1 million, a significant decrease compared to $0 in the prior year quarter.
  • 3Mortgage loan origination volume increased by 15.8% year-over-year for the quarter to $83.8 billion.
  • 4Gain on sale margin decreased to 2.78% from 5.19% year-over-year, impacting profitability.
  • 5The company's servicing portfolio grew, with total serviced UPB reaching $507.2 billion as of June 30, 2021.
  • 6Marketing and advertising expenses increased by 51.7% year-over-year for the quarter, reflecting increased investment in brand and performance marketing.
  • 7The company maintained compliance with all debt covenants as of June 30, 2021.

Frequently Asked Questions

The primary driver for the decrease in net income was a significant reduction in the 'Gain on sale of loans, net', which fell by 50.7% year-over-year. This was mainly due to a lower gain on sale margin, despite an increase in origination volume.

Rocket Companies experienced a strong increase in mortgage origination volume. For the three months ended June 30, 2021, origination volume was $83.8 billion, a 15.8% increase compared to $72.3 billion in the same period of 2020. For the six months ended June 30, 2021, origination volume was $187.3 billion, a 51.0% increase compared to $124.0 billion in the prior year period.

As of June 30, 2021, Rocket Companies had total liabilities of $27.4 billion and total equity of $8.2 billion. The company had aggregate available funding facilities of $31.4 billion, with $19.4 billion outstanding and $12.0 billion in unutilized capacity. The company confirmed it was in compliance with all debt covenants.

Marketing and advertising expenses saw a significant increase, rising by 51.7% for the three months ended June 30, 2021, compared to the prior year. This increase was attributed to new national brand marketing campaigns and increased performance marketing spend to support higher loan origination volumes.