RKT - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Rocket Companies, Incorporated.

First Quarter 2022 Earnings Call. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded. to of conference Investor like Ng, to now President Vice Relations. would turn over the Sharon I Please go ahead.

Sharon Ng

first With Good afternoon, Company's and Company's the our Rocket joining CEO, us of everyone, and CFO, COO, thank earnings you Jay Farner; President call Julie are and this afternoon us for our for quarter Rocket XXXX. Booth; covering Walters. Bob

outlook. or This the that and statements risks materially conference you could risk our to website. further information call subject is uncertainties Investor uncertainties. later required our update On for with expectations call things These This me the as the assumptions our quickly of our regarding includes we disclaimers. differ forward-looking a let the performance and our to a risks over SEC you on accessible online go from undertake provide Jay, are law. result Relations discussion being today. in by these no filings broadcast statements. recording today's quarter will to is mentioned turn cause contained and today. of we obligation to well be and I results these actual financial Before as of We consider call available detailed encourage call, factors events, XXXX first information statements the A except as over new as to We

things started. as get Jay found measures. our our well also to SEC. financial reported non-GAAP include to Reconciliations will earlier can for Our Jay? Farner I'll us with non-GAAP issued that, the with today earnings results on GAAP today be turn And between our over commentary filings metrics release also as and

Jay Farner

and our $X.XX share. this mortgage has over over more rapid than XXXX. both the today's navigate in increasing Good $X.X X% and Sharon. first interest welcome increase rate per years. to will XXX always adjusted mortgage and adjusted been in of time thoughtfully months. or of first while market. refinance We'll points strength I'll generated year for rates Call the In you, with and products today's cash-out for past Rocket Thank marketing north our the navigated the diluted and discuss of now XX-year continue for largest adjusted Rocket evolving Companies call, We EBITDA. share how first creates to decade, quarter and The win $XXX Rocket rates market share. income rapidly Rocket times are of Companies' protecting continue technology how net our billion On conditions revenue expand XX to by Earnings basis afternoon, fixed in in successfully purchased the and Companies the the $XXX of million platform. a in adjusted Rocket delivered has in we quarter, to few invest through challenging industry. grow margin continuing turbulent profitability, This to obviously our million

the and market as ultimate the emerge winner. stronger, share through will grow market reap cycle We the benefits

intentionally to the talent business built and ecosystem efficiency; willingness Rocket strong platform team up high conditions. platform leadership technology business; impact the of excels. key navigate reflects top diverse balance successfully with sheet, industry get to the and market guidance billion this to quarter national funnel, $XX volume look channels of market navigate our second areas to we the As operational market Rocket best billion sleeves experienced in and with an model all the requires difficult closed experience, broad a ability to multichannel of rate a and our into the unprecedented loan roll the our where In forward, a several of brand; their strong scaled tough $XX increases. the experiencing a attributes: has capture

insights We pillars more partnerships. industry and March growing brand, leveraging has billion invested best the performance that Of our maintaining significant is an have as decades billion rate in substantially environment. more growing in XX%. attracting book benefits heavily importance than marketing our $X for platform XXX a lake, retention fact grown data investing represent servicing in a rising technology, $X.X our rate industry-best while than important our trusted quarter-over-quarter, invested XX% by in client in the cutting-edge strengthened premier records asset talent vast our the of XX, with of enterprise the and rights from of Servicing million

revenue. recurring generates alone cash Our $X.X of portfolio billion servicing annualized

and $X.XX itself. also Turning used and of and strategic with value our represent Rocket and the share. to asset $XX.X has a the financial of of ebbs on billion March market our to mortgage rights, while servicing along as maintaining per billion scale sheet position. of when The opportunity our to right the available cash cash of balance the or $X.X if XX capital the for amassed self-funding strength flows presents expand our through weather acquisitions, platform flexibility total

changing reduction our spend. implementing disciplined in career transition voluntary a vendor quarter, that during we've the to program measures including costs, marketing renegotiating large second contracts market. reducing We and team production taken included this be expenses will our certain with And shifting members, significant cost

into minutes. structure review effective and Julie running an efficient are to business. in of specifics and aspect deeper dive will cost a continue committed these every We our to few

capital thoughtful to while Our that invest for areas to be the position strategic long efficiencies about us maintaining up us strong allow set flexibility well term. operating expenses key in and

risen Home available spots demand remains perfect $XX who millennials, Home trillion online for the first-time buying While in of generation largest expect and our XX% industry. the is values Rocket's us. there strong, creating app particularly millennials. from are we equity. challenging by first-time This times population. highs, currently or platform bright have to new ahead, homebuyers homebuyers using clients or Since of the apply

lender nation's to was first-time homebuyers fact, XXXX. shows the securitization largest that data in In recent Rocket

market for rate again ripe is when refinances. represents and Beyond client a purchase, future term pool this once tremendous opportunity the

market best ecosystem driving ability first more Rocket's purchase strategic out has As and refinance and every our purchase rate our provide had mortgage XXXX our its are and of nearly a the shifted has predominantly achieve and and refinance advantage. XX,XXX from shown Each overall today's market, refinances, in ever term XXXX, day, XX% helping We cash having than for bankers their quarter volume. cash-out dreams. origination mortgages conversations, Americans to

today's helps speed purchase-heavy estate deliver certainty critical agents Our as the that need. and technology as market that our platform well partners are clients our broker in and real

from loans launched business for close recently program received FAST In mortgage guaranteeing will broker clear to XX documents or to less. XX go fact, our partners, days in we broker the purchase

partners In mortgage title leveraging addition, gained executives Pro data for for our our helping and most exceptional X the look third-party brand trained support, among broker by TPO Rocket our further and commitment operations marketing the to expertise, We a speaks and to to lake, force. Rocket according first account opportunity client conducted our This insights vast out our firm. its highly favored brokers succeed number brand harvest grow. cash refinance in to cloud study time, has health of

events debt, levels Our high equity a bankers remodel life's growing like record consolidate home help marriage are using navigate of clients their or family. interest educating homes or about to

official we of start as As has been which home into seen buying move QX, by the season. many

verified letters had record by XX% than pipeline a been in approval level and robust, has March, pre-approvals grew purchase more Our our year-over-year.

lives estate our in the engaged ecosystem, Truebill annualized setting generating record XXX% our invest users, up to over company became of X.X paying ecosystem Rocket our million and members, the our real both December, from XXXX. in March, has Homes X in million in million its members, that helps recurring Rocket best million and manage and impressive $XXX entire than a million than X.X part clients their monthly more premium XXXX. from doubling platform. reaching for growing The Rocket continue number members, has which X.X transactions, doubling QX more of revenue. of active of Included year-over-year. expand We in now the X.X clients notched Truebill, keeps continued in growth. QX financial

the Edison March are volume acquisition XXXX of March expansion. to surpassed the volume purchase last successfully more year. and million quarter tripled first and of compared of Finmo first digital growing than Rocket its more loan same Our mortgage Funded XXXX. QX continues quarter our Lendesk, in Canadian cumulative And its in Financial, mortgage volume of integrated Solar tripled brokers, servicing than submission subsidiaries our from the XXXX its quarter doubled provider, the month XXXX. through rapidly. in production nearly funded first loan Fintech $XXX of brokerage, to from of volume

on month. in and launch We Florida With a serve client major operates phase across the markets is further our more we mortgage X for executing numbers. be In exciting our early extending slated complex certainty into better by to next currently our South and fact, ahead to new our dreams. it and opportunity XX ways, clients deeper exhibit creating same it our the most true that, so strength the fulfilling moments At With our go continue we over can live Julie? at playbook that to forward to move to time, their platform. public of this leveraging clients cycle, full to Carolina, of to the states, look including the in turn mission forward with see Arizona, lifetime I'll value best Julie platform. in life's

Julie Booth

everyone. you, and Thank good Jay, afternoon,

market changing rapidly market conditions, changed of results over year dramatically. has the few experienced largest frame deliver in year, increase while and the been months. years. XX of rates building areas It's important continued key these we beginning past through profitable interest have to have investing out Rocket navigate we in The conditions also business. has platform our As Since in to further the rapid what our the this in

first QX company to first this are diluted of raised week, and at XXXX. XX loan net more per million income has Fed results. billion by quarter continues or delivered basis of the $XX.X of EBITDA time. XX% to Fed locks rates Companies compared of margin and the adjusted during QX billion the in XX quarter rate $XXX We gain points, net points GAAP rates adjusted of We the adjusted any million one billion perform, years, than billion per backdrop, last raised at billion, of points. in $X generated we revenue of $X.X proud EBITDA in a in time XX $X.XX representing on With by and We had generated Rocket share margin. our the adjusted or basis of closed $X Just XXX basis adjusted of $X.XX income a net diluted our sale share. $XX quarter, $XXX volume

demand spurred refinance home in cash transactions. mentioned, rise purchase robust. The has Jay remains out out values refinance for for As and cash demand

with strong levels in March. remained As pipeline, of we record our seeing are demand in own purchase pre-approvals

Looking ahead due increase our to to the has rates QX, to business expect occurred rapid in year-to-date. face headwinds we that

For lock quarter, range billion to $XX the billion net the between $XX billion. we of expect million volume volume second and loan closed $XX and $XX rate in

XXX on We points. gain expect to second the sale be to quarter XXX basis in range margin of

quarter due points. in few in sale sale margin margin bond which by on rapid gain on the onetime gain the QX Our move to first included lifted basis benefits a markets, XX

point on first have basis lift, XXX sale margin XX been this Excluding would basis gain quarter points. our

Moving expenses. on to

result measures of quarter. we market, significant remainder changing second the of mortgage the cost the a throughout are As rapidly taking reduction

the a incur in voluntary second career to rolled $XX $XX expect approximately program that we of to million the to quarter. We transition related out million onetime charge

decrease savings savings driven cost career basis, transition quarter member related QX expect $XXX roughly approximately in from voluntary expected lower annualized to of Excluding costs. other billion. million quarter from million $XX $X.X by to compared reductions be On around roughly $X.X this million decrease program cost to career to our to is a we first $XXX quarter. voluntary Around related our expenses charge, as be of million program expenses. the partial of are an of production per and total non-team onetime expenses billion $XXX or remaining transition approximately down expected is The be $XXX to the million

and team clients members. our serving of on taking focused care our are We

long-term invest of areas key to will growth. while with We growth the continuing business our platform be and for to support to of ecosystem in well position disciplined expenses our Rocket

we've prior our talked book on is about asset Rocket. strategic servicing calls, As for a

included $XXX clients XX, our balance. portfolio billion of million March in X.X principal As with unpaid servicing

compared mark-to-market months first the our mortgage newly-created increased of of the During adjustment $X.X to $X X value rights MSRs or the to XX% servicing by including XXXX, billion. QX billion and

million market While adjustment in noting environment. the which in is MSR mark-to-market was the value positive is adjusted change metrics, our excluded rising on in net portfolio portfolio first from $XXX countercyclical the the it's that income a rate worth quarter,

therefore, result with higher of the interest the the increase in a cash recurring that and rates, is flows a cash value the assumption of servicing servicing greater. portfolio be will will our mark-to-market As reminder, the extend revenue

client lifetime value clients as in to first book the XX% their net our and was XXXX client us across for drive coming our servicing rate for quarter ecosystem. and and products Our into mortgage positions substantial our serve mortgage the ability reflects of next retention of Rocket well to clients

also We annualized considerable servicing clients' drive from a of our revenue amount recurring mortgages.

During the book servicing annualized our over recurring billion. quarter, first revenues from $X.X were

cash well-capitalized a with our when allocation with mentioned, of cash originations servicing of $X.X available cash sheet, undrawn to remaining capital billion while revenue of sheet prioritized annualized From at a recurring used than $X.X our an $X.X opportunistic. conditions including undrawn of Truebill, of portfolio exited billion March different $X.X perspective, on quarter credit capable Total plus of from available the the navigating of flows of we Jay and billion have total lines the we MSR maintaining We as corporate for and $X.X market liquidity balance substantial have XX. liquidity XX, self-fund a considering billion cash As always stood line. balance first and billion. March as and cash additional loan self-funding more

equates our billion billion of $X.XX combined share. March represent with value of $X.X rights cash Our mortgage balance available and billion XX. sheet per total This self-funding to servicing of asset of as $X.X on $XX.X a of

are We back the we'll manner for it in generate operator the our a turn positioned strategic continue deploy questions. capital and that, we value. shareholder to current well and ready environment, to to to disciplined in long-term With are

Operator

first Sachs. Instructions] from Nash [Operator Our Please comes go question from ahead. Goldman Ryan

Ryan Nash

good evening, Hey everyone.

flush could bit and So guidance we a Julie, maybe the more. little Jay out

there's other cost I'm and So reductions. you separation talked element marketing. about non-headcount-related scaling in voluntary of guessing an back

in together, and backdrop, just do enough given in to next back, And have playbook a put you you of profitable I think cost leverage this perspective? the this the And have quarters near And to do term? the all when side is Rocket stepping playing see second, -- you terms of sort cycle So the on then the you expect follow-up. what through how how profitability the cycle out? remain navigate from of few you a revenue

Jay Farner

actions of chime Sure. third I'll XXXX, get kind started, been XXXX. I've glimpses ensure is in company while got through one success. that team but we've We taking of in. have 'XX to in and and before, lived that I short-term process And think our But been members, exactly we're saw inning that's 'XX, XXXX, back long-term little you've of view up something as Julie some telling we've in certainly and to the set can you're a the what for that this here of doing. this

I'm very Julie's my quickly have been you comments making that we from proud adjustments. from team and comments how think of can and I tell the

handle to presenting then to $X.X that that built think trillion, is I process which see comment marketing step question not thinking about So is so about to at. got a market, you've And in it filing a the marketing, made up our beginning $X $X.X opportunities, going where starting that marketing, much you first be we're is reduction as was in to opportunity And industry. as the it's or itself. capacity capacity of see as marketing? shift more of we out come to start starts what is out to the in come that’s a that's And the we're happens, think that trillion trillion performance

look market that. we although to our the much our is interested from remains So ability marketing $X trillion, when moving certainly, and than our trillion are who reach, to $X.X clients at stronger reach

got And spreadsheet is see going long-term And brand-new marketing a on success. that particular, into so process team your this team phase that us a earnings are read operations to sets in of an your The of market. who you're mortgage moving for mortgage about all up folks members, But probably in leading bankers, your next you've your something isn't now release. your members, or team.

go are on don't be in you that amount is mindset. position day -- -- work are I'm doing watching change the that the with read shift mean operations, the gives successful. effort of day to about end, to it. our market in single I'm the in over in have And marketing, ensure we're I'm to in the seeing hard leaders I hit meeting data, floor. get leaders and in years. every so do adjusted the us offer, for now, what there that putting the members client shift the necessarily that and and team confidence coaching almost demonstrated right I'm and day and side, out to that seeing leverage to marketing books, day it, the and on new offensive banker then our but that's out And the adjusting And the this you that XX rock incredible the me so out our XX you business right we reaching day. win. And

And you're she at On put your can your and leverage this, spending we're sheet. tight it's more expenses headed. balance about ensure defensive course, to right order you've talk we're and in side where and of kind then, that the the grasp of dollars. speak got place get can Julie a on and And everything to where your

as back we struggle, get a in. than as our ever about people we people been of see there'll value asset we've position in see But we're we organization. advantage right position of keep better We pull reduced, an the then the be before take they're positioned so talked asset investing. see will Julie And perspective the to as is grow. last us opportunities say if turn that we're those ones, thing I'll And And to I to from capacity opportunities.

I product tech beyond we people clearly, talk that we the have group, on originating in But serve technology grow that about our the Rocket if of mortgages. today keep so to And And hundreds hundreds look strategy platform will want working at in Mortgage. you in just group, investing more And will rates. things higher platform, to to you. consumers out are history far in you has with explain marketing can people when our mortgage. 'XX what Rocket group, need that able and they platform And our not into been we don't and our to and I our our at that, our in interest interest bring go to a is more and of engage when look here ecosystem rates. why. see rates that company The is The capable help clients just reduction see 'XX we at fall. to back be we interest

Now relationships we're to we're we future, Homes, we're ourselves now magnify have and can business. to you've opportunity those for that with those so where reap manage to by Rocket hard have But work do the to and other engaging Truebill, next Rocket clients setting the setting with up Auto you them the up continuing got data ourselves in assist the got to benefits. those services, clients And about clients.

Now we've ability to XX-plus years. for it demonstrated our profitably manage

that working about to through expenses in we process on So you how the there. we're Julie, think maybe comment want

Julie Booth

what And said, Jay can. position decisions as sure business growth. making just are to the for said I that long-term many intended before, we've to we're reiterate the Yes. that times

bit the profitability. us that we've amount to again. dwarfed expenses in make opportunity are decisions that is can little these when So and again, seen The today be through short-term save long-term extra and we time seen by make holding we've expense, on we going We've been won't can we sacrifice comes to time upside that to by future the what of going time a time cycles.

expenses. how certainly we're said, responsible diligent being that looking very at So our we're and about very,

quarter, from our related million the excluding $XXX billion why the seeing million to onetime So of about in $XX career to second program. quarter billion our this transition $X.X we're quarter in to is first million down $XX expenses charge coming the second the roughly voluntary $X.X

voluntary continue something bit time is impact come a put be non-team the About continue that have finer realized million expenses. quarter. member these half take to going out. on expected of career the it point going our And million a some of second we'll through looking year. So $XXX natural so we maybe do other be to a on quarter. million around that to rate an be $XX savings. our are There The through to are program run $XX cost at that in will Costs on of to annual some basis, be a to savings expenses. little attrition just opportunities get transition throughout quarter focused is We'll to to from

So as we'll of the a third in full that well. see quarter quarter

out QX going about the that rate, third fully out continue at out there's to coming lot So QX, annualize coming think the the another million And from all a from $XX be it's looking that's when if million run at here about as look but here. to that rest of savings how quarter expenses million that of in will taking implement we're we're annualized we $XXX program, $XXX the through you year, transition we to our the QX we go if you earnings.

Ryan Nash

just if as question ask I on follow-up it pertains to could And sales. gain a

which next good a to guidance out, slight And is the capacity implies we're quarter So hear pressure. starting coming comments, for sign. to Jay's

out mean the just if the the which curious adjusting don't in size to. $X.X commensurate move trillion, market at environment can with However, margins down think how beyond the quarter, pace in particularly, the is just from how you I'm capacity see what for given about markets to rapid we coming $X.X next trillion. the

Jay Farner

Yes.

out rapidly. I quite coming think capacity is

of provided mortgage that XXX if of And kind margin other comments, it's for talk and she at then QX, listen Julie's I particular. guidance to think As onetime ballpark. I effect as in in And you think I leaders you you QX, the to similar -- in space referenced the the across look excluding kind XXX. watch the of

Julie Booth

XXX. to XXX

Jay Farner

to XXX XXX.

us the So that we've you're a as past range I seeing in of well. think kind seen in

Julie Booth

Jay. right, that's think I Yes,

As you on gain from margins into I XXXX, at of think at XXXX. sale look the margin. were XXX second we for By XXXX quarter

quarter. hold You as steady QX, XXX, of have then kind XXX. I XXX would XXX, been fourth that see mentioned, to it the in

So look guidance, as past XXX, out really you at our it to the quarters. several over here XXX leveling is

Operator

Our Suisse. next question from Credit comes from Doug Harter

Doug Harter

Hi, about do and about of Jay, just up in MSRs? on using you following invest that many wanting get think to do as to comment and liquidity kind invest a you purchases made How have higher coupon you possibly that customers. MSR

Jay Farner

we our launch for is I Truebill, Yes, a in And as the us. that can especially to decision. on we servicing very engagement critical programs client question. think that working team that other Rocket to working think about continue strategies of are we're Central as that rising one add inform this And good certainly, referenced because to some we book, the about the on ways to year, the of we

As buy system. to the the by advantage great when remember coming ranked purchase we doesn't also platform. because through are going But service we servicing if number X it's to an experience important to client already as opportunity have have our a our MSRs the in people originate J.D. Power

of kind experience have on. don't And so they to that rely

these engagement working we're on. So developing then and tools employing that other

to to additional that, to has MSR And our us. move to asking. similar kind that, is to what build conversion as of works. we'll our that And see we ones the the or great retention clients platform But benefits. know been want course, if that purchase And would that's that purchase originate client our future, do the clients So we reap to components us we confidence our of mission. of we the advantage book and build purchased of value and you that because very engage exactly we on we bring as continue turn can these we a strategic next to continue you're because in rate. know an MSR, strategic we their out XX% extend out gives they They that rates lifetime

forward talk doing So we calls, continue subsequent the there. year in that I'm work we're sure we'll as about this more

strategy, we've the the So think wanting that make that important being of of components critical all that also the lifetime it, platform. those we got value we thoughtful really sure are to bring but to on about MSRs maximizing

Julie Booth

we're the $XXX numbers topic put while million on capital of about just MSR. we MSRs, that, did to some around XXXX, in Yes. of acquiring Maybe

So in it market take And for at for these mentioned, we're reasons potential us is looking strategic opportunities. that the we a that something us one for that is for very That going are that many one there's just Jay the to sense makes if opportunity. asset reasons. a

by in of $XXX value, first increased quarter, In terms asset million. the the just year-to-date about

continue As and to that interest rates cash flows continue to rise, asset becomes more more valuable those as expand.

value so XX will up now. but to it's for nearly at billion it's value valuable April, us. total through another about very, or determine depend where in very $X ultimately is million us, Interest $XXX fact, rates June the quarter, In that to

Jay Farner

a benefits opportunity a with ourselves in higher set falling MSRs rate up market, of that future. that it's say, it beneficial. But thing at sometimes well, buying when you we people average be appropriate last MSRs off us you want buy refinance always because it's cost a rate suppose to kind to or take will I'll the And that to Yes. average of people coupon guard, to the now, client weighted catch interest people it. want I weighted because lower in mention advantage maybe actually at

So at interest MSRs us a a advantage the that's and the again, things our lifetime to level. we're higher strategic to back retention building even value rate give be and that all the purchasing rate

us goes there. on to see time So as you'll lean continue in

Operator

next The comes Piper go from from Kevin Sandler. Please ahead. question Barker

Kevin Barker

relative to volume have I the you're more bit a cash Why that in out strategic you dig make purchase you of large are while still at the cash amount further thoughts you seen. of of pace your afternoon. tangible to to could a wanted the are to those obviously, you significant ratio capacity is accretive operations not purchase just to have equity appears refis of potentially purchase amount that you equity it it's increase time, And and mean, originations. your I you But would a on Good -- enormous quite common efficient not of portion maybe volume lowest of then in that acquisitions that leverage could pace acquisitions. to apply not keeping keeping And with and some to your of direction or Rocket regards be some to have little it, the it's significant your the XX%, producing. we've What increase cash started those volume. Meanwhile, quite market. garner a same amount it the deploy. on look can more technology that? some of appear

Jay Farner

we we I I QX at, pre-approvals other that record purchase. of think first, any Well, Yes. look when in the we were originate able QX level see at to closed think, look we when continue volume traction we've in to a purchase compared had, most in the QX, record for to setting

to the in people capacity the I strong in particular, that quickly. think is resources where areas continue fact market. don't that will be the to coming And have amplified by out

to of grow are capital those the be investment opportunities are very to making time. staying market, think strategic, way -- purchase. of organically got do. I we've them, that matter always right And I and make what to lean type that And purchase investment, Julie at ensure So handful allow to ability a the of opportunities right into us the says, a our confident we just said, about your comment if we'll may strategic making them the about feel -- the That exist. our we an other there watching and it's to that's of like close right the availability that

Kevin Barker

And do exists your also outflow just it float to opportunity you as aluminum potentially see an for given the today? that increase

Jay Farner

about increasing I the don't know flow.

doing we been shares this think we've as as in our I been back be it point buying to an opportunity see and time. at doing I've

Kevin Barker

the question. you taking it. Got for Thank

Operator

comes Stanley. The James next from from question go ahead. Faucette Please Morgan

Blake Netter

James. on for the Netter this Hi, is line Blake

HELOC. into question, First are leaning certain competitors

refi out the you currently that as up of what as in means And you of cash given consider aren't HELOC I'm a the in are the aware? refi the addition, takes far Is something for volumes. and puts as space that making some In there? decline

Jay Farner

Yes.

additional capital actively is team offer. Our looking markets we strategy team and at that programs our can product very in

think or rolled our X few a they've in out a space. recently, here programs TPO ago. week here different I I was particular, something reading to

today, continue or And in but it's so or things. clients know allow build that of right a then we're products to HELOC active there, a not a those us I think relationship the about second they'll whether the system the only to help our to type future.

seconds One so that stood clients solar improvement because to recently sense of the things home we've the rising even market. do team here and/or up a it makes of rolling and those for in rate on is a certainly, in loans

when gain the and revenue future it's And today, them about understand those and so out we'll refinance also clients continue only those again. to products brings revenue will for but think to the that time us rolling

Blake Netter

And moving your pipeline? of hedging And faced helpful. terms have on, That's if in volatility discuss any can seen uptick you in given it. around any hedging how costs? big rates, the you an of challenges recent Got then you

Jay Farner

markets was and that hedging a is say I it's think from the capital pipeline our would been or very ago with about so well excellent where perspective, delivering. job our the size and that hand they've in a doing pleased results here an team pipeline year

Operator

Vandervliet comes UBS. The Brock next ahead. question from go from Please

Brock Vandervliet

question. the for thanks Yes,

of as that all, kind also should if that how at commitments, this orientation resource about orientation your And toward is terms and backdrop, partner? of think affected how -- your versus outlook you changed, we Just rejig has that? in rate this direct-to-consumer in -- how your marketing

Jay Farner

of our Yes. question. all good Very we're channels. of all -- Look, leaning different into our

have we direct over Some than others. more control

direct-to-consumer ability basis And things. so gives at the allocate those of perspective, an we that we make almost of in adjustments terms to how all how hourly market, from us a leads,

we're operations for pleased really us the most now wholesale space, that we're was So to executives survey just a on space, in asking marketing grow party probably brand in was reiterate ago, in based know the we're group. that third-party but a our there. active X partners see excellent given We platform more here third their that it's for delivering to account and week we've or most market. the favored I have as to our been they been a great And more broker having fact. out about to service challenging assistance think

So we're providing that assistance partners. those to

some our other strategic. of And relationships are long more term and

allow next be at us sales driving ability focus are long-standing or the is in will we're relationships to years to scale integrating for leverage with going that financial month X, focused down these X, where a banking to So our road. to on directly and the institutions X start in as two, the plugged -- in relationships and revenue the us are grow these are we institutions. partnership, force not These

So But taking X, one it come, when originations all that in we a, X, lowering take rate being just when there. a back years down a our integrated, kind interest about to can thoughtful future. it fully rates whether happens, the being no years especially that exactly of accelerate in hey, drive originations in drop we're -- the happen. tech advantage where approach the market work We're drop to predict not more that's today of how's will really X, will ability start done that can what seeing with again,

Brock Vandervliet

on in out Okay. sale, gain helpful. partner direct-to-consumer again overall particular And on call which of contours the a as guidance, any Is versus regarding you'd on follow-up break heard is gain I there the terms sale?

Julie Booth

quarter-over-quarter. consistent fairly been really It's No.

Operator

Ryan The Zelman comes from next go McKeveny & Please question ahead. from Associates.

Ryan McKeveny

turmoil necessity have come as And obviously rates So looking there's profits and space, of into moved cash of a the Fintech higher. the focus. flow around lot broadly,

the business, generative, approach or profit mortgage the you've the profitable So of expanding believe newer in relation I the continued in business when Homes and aspects obviously, expanding solar Truebill. Rocket new you've has or past, it's also remained into in cash segments. first or the referenced your but to platform, auto whether

today? change on you just any and profits if guess driving business expansion I do businesses you forward? comment, I in in for dynamic a -- you the positioning what's or about your businesses across across how feel growing can you non-mortgage So penetrating how those space, those going today guess, outlook market macro the Fintech and moving businesses? the given for And competitive Are those investment see from continued

Jay Farner

Yes.

few the side bit young So the traction. Canada Julie tech and comments can Venmo both the and on seeing standing a a technology, there I and of talked with rate. But is a success there That's of to our then interest we're think mortgage folks the here. or regardless market the when make in growth years X interesting the a the philosophy us because growth now every the very Edison side I years brokerage. with businesses, primary has their Lendesk about investment today, up are certainly, starting the objective. been, for see you're we're infrastructure And it's in that few refinancing really X

platform. businesses clients underneath so Rocket good start get Homes thinking a about an economics. they like impact have profitability not And offer we'll for Solar, to those some but has only as allows businesses them across those very on Rocket things Homes, particular, or now a experience, their in our great our feet unit perspective from Rocket

and and being And so that a business. think title about mortgage operated real when both how estate, as as impacts we profitable and it about we that business think

on interest here our be there of which, CAC or the going these month client. quite unit good, so, launched, showing have is economics the early base we're a growth, in current and client us course, although I are client-facing announced solar, a its gives in And that on that that website but the will fact states to virtually our incredibly in especially and low

fairly really board, a And today position has business also about about businesses focused can Julie can manage future. is these that's but grow, ensure to thoughtful being So been the we and that in we're profitability we're where ensuring we that think that as across that very a quickly. move in how to strong the

Julie Booth

-- That's some are investing right. their maturity life profitable today, And cycle, we are various those and their in are others businesses in in own. Yes. on and stages we're

from quarters them. feet under those going to of perspective, of businesses But invest other and the they Some business, versa. aspects and new other continue from business mortgage the to continue here were their several start-up ecosystem get that the to for in there's an them vice get we lift as next

individual investment -- each path a businesses, of of a and profitability working a do businesses gain So those certainly whole also synergies company one that get the to addition as the together what for we about being the but in those as each have it's beyond profitable we those phase. of we to

Ryan McKeveny

and Helpful. Thanks, great. Jay That's Julie.

So one question. more

allocation. an share environment. just know somewhat but I And significant strong balance but been via capital I guess uncertain looking special dividends has been Just asked, capital returns obviously, sheet, the to what's back pretty this and done thus macro with repurchases. at far, obviously,

to a think So going shareholder backdrop allocation into capital about I looking forward? should guess how plans more for what is the uncertain we priorities be and returns

Julie Booth

have good Yes, we shares million back executed at program XX.X point. this at look bought you And a cumulatively billion question. and it's if now buyback our $XXX have million $X of

back at business continuing the and to going we're in on always past to as we're buy shares first. -- look this in the to investing there we've about the talked opportunity at So said look call,

in the we yet. in at. through shareholders will way capital look in something continue opportunities just said here in be at Truebill us see for just think We the additional we And to our saw You market from returning per there's changed past. And cycle to nothing's do buybacks there. to purchase structure quarter, to look here capital se kind that fourth the to opportunities -- look on of and we the early come what continue

Operator

Shane Richard last from question JPMorgan. from comes Our

Richard Shane

Two question. Thanks everybody, for taking questions. my

a and for approach much appreciation we servicing what's of room is higher First, there terminal there CPR’s. ultimately, the how But rights? CPR, a think be And a as was the of impact MSR sort about of you are to conversation valuations MSR rates. function of more likely really do

Julie Booth

Yes, that's a question. great

closer the we see get of significant. upside CPR kind less we As that closer do floors have and is

increase. Now I said or -- the $XXX just sorry, year-to-date in is million quarter-to-date QX

that that second assumptions to is increase. of the The float Interest drive value increase is also significant and the in on lot quarter. very is the the as there's for still earnings well, what drive So a rates that. driving room

you'll diminish. upside start still of with play some you're right, the levels at But So have those to both upside does room.

Jay Farner

is present the annualized others platform the to we benefits about discuss rate, profitability. MSRs an on margin, or opportunity imagine action I taken of to now million about see actually and MSRs we'll still and that there's raise lifetime to we continue those think capital pressure we've We're operations. of opportunity about an time because she those sell. talking the referenced when as And in who market that have holding to and perhaps cost and as spend a that an need our that thinking more to value. MSRs about of generally we be us should sell we this us in where interesting the the $XXX and talk for we talked And or a talk purchasing million for And on. business, lot strategically direct-to-consumer, about management situation Yes. savings $XXX about

an along place means focus us opportunities, So platforms, these we go or year. for to that as energies thoughtfully otherwise all platforms, exploring through the our important bolt-on pressure with is under that, origination tech

Richard Shane

helpful. That's it. Got

liquidity to other manage just you liquidity risk Can greater expanding execution. products Second one originations to of has some again, of context bit overall your of and Rocket products public when of about hallmarks alternative I how in business. are of small is But and be very the sensitive want the little that balance that? I on that terms mortgage a conforming And a we sheet your sort context you're that you risk in talk of business been in of this, about and mitigating there focusing which think is the related the by question, to the or the company some that uncertainty into, as of suspect markets. new the

Jay Farner

but great you avenues also today Well, whether perspective, that because got doing always a want any we've do working it's mortgage, of important it, other if for products many we're have. and that's the to a that we that sell us. would for to about it's financial making years, if at always we've on multiple hold got want our option marketplace an continue same will we of we've think for look product. about anything us, We'll we And that we mortgage good originating there's what we're liquidity. thoughtful to that hold be that or investment from situation. buyers Everything whether think to talking we but sure outside and in we're And that really for want you're philosophy I whether today, had

Julie Booth

Great.

products have and securitizing that's certainly always will the as liquidity, that it, setting sure out, finance consider down as we're making always minds it those whether for first we We up. it to road we liquidity foremost be originate, looking be volume our first grows, the immediate in and

Jay Farner

moment, month life that a great for like month the in situations have because think I keep where you the just see business. is end of past very lived of to many living or the that challenging it's and we a you're place And long-term those it's you're this in, critical Yes. view now one decades to sometimes we is this

revenue bit little would a something interested So concern product doing. a add But of in top the today of has our a to liquidity be line originating not that around be business. we might that would

And it change move business that company. the when you but our not And able way we scale. our to again, greater up the capacity it's The higher that would to rate. bring be that interest will the and rate if, we've focus clients in a is even on on is way you're industry matter opportunity. as making there, in grow quickly, the you a we higher we're interest have at Our sure business what that strong that done brings platform on strong have and be past there's continuing our can that move setting we're do entire but of and key you is because shift rates

not some that's any short-term of we so never And that product to risk want of decision at around put a sort would over liquid.

that for the of members. take Our clients and know the of things all have focus out run here care build that our care our take platform is success this team continuing to of to invest will in we and long

Operator

like concludes the for to our conference question-and-answer closing Farner This remarks. to I'd session. turn over back any Jay

Jay Farner

questions, joining great Well, for with and next here we to call. forward We again us. all thanks, appreciate the you the look up catching at a everybody, thoughtful Have night.

Operator

concluded. now has you for conference attending Thank presentation. The today's

now may disconnect. You

Rocket Companies (RKT) 10 May 222022 Q1 Earnings call transcript