Rocket Companies (RKT) Q1 2025 earnings summary

Executive summary

• Adjusted revenue for Q1 2025 reached $1.3 billion, at the high end of guidance, with adjusted net income of $80 million and adjusted EBITDA of $169 million, reflecting strong execution and productivity gains.

• GAAP net loss was $212 million, or $0.08 per diluted share, while adjusted EPS was $0.04.

• Closed loan origination volume grew 7% year-over-year to $21.6 billion; net rate lock volume rose 17% to $26.1 billion.

• Announced all-stock acquisitions of Redfin ($1.75B) and Mr. Cooper ($9.4B) in March 2025, aiming to create an integrated homeownership platform and expand market reach.

• Initiated the collapse of the Up-C structure to simplify capital structure, reduce share classes, and enhance acquisition currency.

Financial highlights

• Adjusted revenue was $1.3 billion, up 11% year-over-year and 9% sequentially, while total revenue, net, was $1.0 billion, down from $1.38 billion in Q1 2024 due to a $505.7 million negative change in MSR fair value.

• Adjusted EBITDA was $169 million (13% margin), slightly down from $174 million in Q1 2024.

• Gain on sale margin was 2.89%, down from 3.11% year-over-year.

• Servicing portfolio UPB reached $600.4 billion, up 18% year-over-year, with a 97% net client retention rate.

• Total liquidity stood at $8.1 billion as of March 31, 2025, including $1.4 billion in cash and $3.2 billion in undrawn credit lines.

Outlook and guidance

• Q2 2025 adjusted revenue is expected between $1.175 billion and $1.325 billion, with the midpoint representing 2% year-over-year growth.

• Q2 margins anticipated to be lower than Q1 due to April's market dip, but volumes are rebounding in May and June.

• Total expenses in Q2 expected to remain flat with Q1, with marketing spend to decrease by ~$100 million in the second half of the year.

• Management expects the Redfin and Mr. Cooper acquisitions to close in 2025, pending regulatory and Up-C Collapse completion.