Rocket Companies, Inc. Q4 FY2025 earnings call

• 2025 was pivotal in executing AI-driven homeownership strategy, acquired Redfin and Mr. Cooper, invested in AI and technology. - Fourth quarter was first fully combined period with Rocket, Redfin, and Mr. Cooper, showing power of platform. - Meticulous integration plan with Mr. Cooper led to higher conversion rates, recapture on Mr. Cooper portfolio. - Closed loan volume from service portfolio at all-time high, closed-end second product volume grew. - Redfin preferred pricing bundle purchase volume up. - Jumbo loans grew. - Historic partnership with Compass to tackle home affordability, with Redfin as exclusive home search portal for Compass's listings, Compass as Redfin's largest brokerage partner, Rocket Mortgage as Compass's digital mortgage partner. - Redfin and Mr. Cooper integrations progressing ahead of schedule, expense synergies on track, revenue synergies pacing well. - Change in financial presentation reclassifying warehouse interest expense from contra revenue to direct expense.

Full year 2025: Adjusted revenue $6.9 billion, total net rate lock volume $132 billion, gain on sale margin 283 basis points, adjusted EBITDA margin 19%, adjusted diluted EPS 28 cents. Fourth quarter: Adjusted revenue $2.44 billion, net rate lock volume $42 billion (excluding correspondent, $36 billion), gain on sale margin 320 basis points, adjusted net income $316 million, adjusted diluted EPS 11 cents. Closed loan volume from service portfolio hit all-time high, closed-end second product volume nearly doubled year over year, December was largest month for it. Redfin preferred pricing bundle purchase volume up 40% q/q. Jumbo loans grew nearly 70% y/y. First quarter 2026: Expected adjusted revenue $2.6 - $2.8 billion including reclassification of warehouse interest expense, underlying expenses ~$2.2 billion excluding certain items, $50 million seasonal items.

• First quarter 2026 adjusted revenue expected $2.6 - $2.8 billion including $150 million reclassification of warehouse interest expense. - Underlying expenses expected ~$2.2 billion excluding certain items. - $50 million seasonal items in first quarter. - Midpoint of revenue guidance reflects conviction in continued mortgage origination market share gains.

Q: Congratulates on results and asks about strategic alliance with Compass, structure of lead pipeline, mechanics and monetization, and mortgage product mix.

A: Partnership to tackle affordability, inventory and demand issues. Redfin generates demand, Compass brings inventory. Leads in traditional referral model, over 50 million MAUs on Redfin. Mortgage products include jumbo, and Compass's price points higher, but Rocket has offerings to meet needs.

Q: Asks about expectations for 2026, market size, share gains, operating leverage, EBITDA margins.

A: 2026 expected stronger than 2025, mortgage market forecasted to grow, Rocket's integrated ecosystem gives operating leverage, Q4 overperformance in recapture rates, direct-to-consumer purchase, closed in seconds, gain on sale margins.

Q: Asks about expense outlook in next quarter, driving numbers, operating leverage, regulatory environment.

A: Expenses in first quarter include $50 million acquisition expenses, $110 million amortization of intangibles, reclassification of warehouse interest expense, stock compensation. Ahead on synergy goals, room for margins. Regulatory environment: Banks haven't put foot in mortgage due to capital requirements, unit economics, but Rocket's focus on mortgage is durable.

Q: Asks about market share expectations, correspondent business.

A: Set ambitious market share goals with time horizon, focus on profitable market share expansion, on track. Correspondent business is important channel, allocation of capital based on expected returns.

Q: Asks about AI and technology, quantifiable benefits.

A: AI is accelerant, increases capacity, improves conversion, removes friction, expands lifetime value. Embedded deeply in system, not layered on.

Q: Asks about recapture on Mr. Cooper book, quantification.

A: Initial lift from getting loan officers onto Rocket system, transferred 600,000 loans, integration ahead of plan, rates cooperating, clients in money.