Rocket Companies, Inc. · NYSE:RKT
Rocket Companies — Q1 2024 Earnings Presentation
39 slides from Rocket Companies's earnings presentation, May 2, 2024
Slide 1: Investor Presentation
Investor Presentation MA Y 2 0 2 4
Slide 2: Disclaimer
DISCLAIMER This presentation contains and related discussions may contain “forward-looking statements” within the meaning of U.S. federal securities laws. Forward-looking statements include information concerning possible or assumed future results of operations, Rocket Companies, Inc.’s (the ”Compan
Slide 3: Overview
Overview
Slide 4: Help Everyone Home
FUELED BY ARTIFICIAL INTELLIGENCE, ROCKET IS ON A MISSION TO HELP EVERYONE HOME. At Rocket, we’re leveraging the power of generative AI across our business. Much of the visual content in this presentation was produced by AI, further amplifying human creativity and innovation. 4 of 30
Slide 5: Building a FinTech Giant
Building a FinTech Giant $1.7T+ T R A N SA C T I ON VOLUME SI NCE I NCEP T I ON 38 #1 #1 #2 YEAR RETAIL REFINANCE PURCHASE OPERATING LENDER LENDER LENDER1 HISTORY Source: Inside Mortgage Finance 12M 2023. (1) Excludes correspondent lending. 5 5ofof30 ##
Slide 6: Comprehensive Homebuying Ecosystem
COMPREHENSIVE HOMEBUYING ECOSYSTEM Rocket delivers seamless, end-to-end client experiences across the homeownership journey, from home search and home financing to title, closing, and servicing. HOME HOME TITLE AND LOAN SEARCH FINANCING CLOSING SERVICING 6 of 30
Slide 7: Investment Highlights Summary
INVESTMENT HIGHLIGHTS SUMMARY Poised to 1 Massive Fragmented Markets Redefine and 2 Technology and Data Advantage Lead the Homebuying 3 Scaled Growth and Profitability Category through AI 4 Superior Client Experience 5 Proven Leadership and Culture 7 of 30
Slide 8: Massive Fragmented Markets
1 Massive Fragmented Markets
Slide 9: 94% of Americans
94% OF AMERICANS view homeownership as a vital part of the American dream. 9 of 31
Slide 10: Massive Market Opportunity
MASSIVE MARKET OPPORTUNITY Rocket operates in some of the largest segments of the economy; industries that are highly fragmented and ripe for disruption. $27T1 MORTGAGE GDP REAL ESTATE $5T2 FINANCIAL SERVICES HIGHLY $2T 3 FRAGMENTED MARKET Top 10 players Total comprise Addressable Mortgage only 24%
Slide 11: Digitally Seamless Experiences Are an Expectation
DIGITALLY SEAMLESS EXPERIENCES ARE AN EXPECTATION The younger demographic currently Current US Population By Age Cohort (M) entering the homebuying market demands digitally seamless experiences. 23.5 22.4 21.6 21.7 75% 20.4 19.9 of First Time Home Buyers were Younger Millennials. 73% of Gen Z and Mi
Slide 12: Rocket Is Positioned to Lead Our Industry
ROCKET IS POSITIONED TO LEAD OUR INDUSTRY The homebuying industry is Market Share of Category Leaders large, fragmented and ripe for disruption. Similar large industries have modernized THE POTENTIAL and moved online earlier. MORTGAGE RETAIL BROKERAGE E-COMMERCE TAX PREP ROCKET AIMS TO REVOLUTIONIZE
Slide 13: Technology and Data Advantage
Technology and Data Advantage
Slide 14: Strong Data Foundation
STRONG DATA FOUNDATION Backed by decades of investment in technology and a robust data foundation, Rocket has already positioned itself as the industry leader in AI. PETABYTES BILLION MILLION OF AI-GENERATED CALL LOGS DATA CUSTOMER INTERACTIONS ANNUALLY AND DECISIONS 14 of 30
Slide 15: AI-Powered Digital Experiences
AI-POWERED DIGITAL EXPERIENCES Our proprietary patented AI platform powers our front-facing client interactions and back-end processing. EFFICIENCY Supercharged team members with more capacity to connect with clients and perform higher value work 170K TEAM MEMBER HOURS SAVED AND GROWING VELOCITY Enh
Slide 16: Scaled Growth and Profitability
Scaled Growth and Profitability
Slide 17: Long Term Mortgage Purchase and Refinance Market Share Gains
LONG TERM MORTGAGE PURCHASE AND REFINANCE MARKET SHARE GAINS $400 Rocket Originations ($ in B) Refinance Market Share Purchase Market Share 13% 12.1% $350 10.8% 11.0% 11% 10.1% 9.6% 9.2% 9.3% 9.3% $300 9% 7.7% 7.5% $250 7% 6.2% $200 4.5% 5% $150 3.7% 3.3% 3.2% 2.9% 3.0% 2.6% 2.4% 3% 2.3% 2.1% $100 1
Slide 18: Poised to be the Leader in the Homeownership Category
Poised to be the INDUSTRY-BEST CLIENT EXPERIENCE Leader in the MASSIVE DATA SCALABLE FOUNDATION REVENUE GROWTH Homeownership LEVERAGE AI Category MARKET SHARE GROWTH We aim to redefine the homebuying experience through AI, and deliver scaled market share, OPERATING LEVERAGE revenue and profitability
Slide 19: Our Ecosystem Addresses the Full Homebuying Value Chain
OUR ECOSYSTEM ADDRESSES THE FULL HOMEBUYING VALUE CHAIN Our end-to-end ecosystem serves our clients throughout their lives as homeowners. REPEAT TRANSACTIONS $13,500 + $3,000 + $1,500 + $$$ = $18,000+ 450 bps $300K 1% Real Estate Title and Refinance, Home Equity Loans, Mortgage1 Agent Commission Clo
Slide 20: Servicing: Strategic Asset Focused on Client Lifetime Value
SERVICING: STRATEGIC ASSET FOCUSED ON CLIENT LIFETIME VALUE $511B $1.4B 96% SERVICED RECURRING NET CLIENT UPB1 SERVICING RETENTION FEE INCOME2 RATE3 2.5M $6.7B LOANS MSR FAIR SERVICED1 VALUE Note: Data as of quarter end March 31, 2024 (1) Includes subservicing (2) On an annualized basis 20 of 30 (3)
Slide 21: Financial Highlights
FINANCIAL HIGHLIGHTS $M ADJUSTED REVENUE $M ADJUSTED EBITDA 2022 2023 $174 $1,931 $73 $55 $18 $1,125 $1,163 $1,002 $1,002 $882 $888 $885 $882 $683 ($79) 32% ($204) Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 MARGIN % (30%) (9%) 2% 7% 6% 15% Q1 Q2 Q3 Q4 Q1’23Q1 v. Q1’24 $B NET RATE LOCK VOLUME GAIN ON SALE M
Slide 22: Superior Client Experience
Superior Client Experience
Slide 23: Delivering a Modern Homebuying Experience
Delivering a SPEED TO CERTAINTY Modern Homebuying v Experience Rocket Experience HYPER- 24-7 “A seamless digital experience PERSONALIZED AVAILABILITY v v is an expectation for consumers, not a nice to have.” J.D. POWER1 23 of 30 (1) Origination 2022 Measurement Analysis
Slide 24: Unmatched Client Service
UNMATCHED CLIENT SERVICE Rocket Mortgage has earned 21 J.D. Power awards for client satisfaction. 77 Millions of clients have had positive experiences with Rocket, generating substantial brand equity and a significant competitive advantage. Net Promoter Score1 Most Awarded Mortgage Brand J.D. POWER
Slide 25: Proven Leadership and Culture
Proven Leadership and Culture
Slide 26: Culture Is Our Foundation
Culture Is Our Foundation Obsessed with finding a better way. Innovation is rewarded. Execution is worshipped. Our culture is based on 16 updated philosophies that we call “ISMs.” Each one shares how we can Launch and learn. succeed and what we value. Every client. Every time. Do the right thing. 26
Slide 27: Love Our Team Members
LOVE OUR TEAM MEMBERS Our team members put the ISMs into action every day. The result is an empowered and passionate team aligned toward a common mission. 2015 2018 2019 2021 2020 - 2021 2022 2020 - 2024 #1 Best Workplace The Best Best WorkplacesTM #3 America’s Best Companies #6 Best Large 100 Best
Slide 28: For More Than Profit
FOR MORE THAN PROFIT Our company and community are inextricably linked, serving as the 2022 foundation for our community investment, team member development ENVIRONMENTAL, SOCIAL AND and business growth strategies. GOVERNANCE REPORT 116 Tons 1M ESG E-Waste Donated Volunteer Hours to Residents in Nee
Slide 29: 2024 All Company Meeting
2024 ALL COMPANY MEETING 29 of 30
Slide 30: Financial Highlights
FINANCIAL HIGHLIGHTS ($ in M) 2022 2023 Q3’23 Q4’23 Q1’24 Q2’24E1 Adjusted Revenue $4,628 $3,770 $1,002 $885 $1,163 $1,075 - $1,225 YoY % (63%) (19%) 13% 30% 32% QoQ % N/A N/A 0% (12%) 31% Adjusted EBITDA $59 $67 $73 $55 $174 % Margin 1% 2% 7% 6% 15% Adjusted Net Income (Loss) ($137) ($143) $7 ($6)
Slide 31: Appendix
Appendix
Slide 32: Driving Transformation of the Homebuying Industry
DRIVING TRANSFORMATION OF THE HOMEBUYING INDUSTRY Rock Financial founded Mortgage in a Box released, In a groundbreaking email, RockLoans.com launched, by Dan Gilbert, later enabling mortgage applications Dan Gilbert pledges full catapulting the Company to to be known as to be filled out and mailed
Slide 33: Strong Liquidity Position
STRONG LIQUIDITY POSITION1 Rocket Companies Cash and Cash Equivalents Undrawn Mortgage Servicing Rights Facilities Discretionary Self-Funding Undrawn Lines of Credit $861 M $2,656 M $2,000 M $3,350 M $8.9 B TOTAL $3.5 B $5.4 B AVAILABLE AVAILABLE ON CASH POSITION LINES OF CREDIT (1) As of March 31,
Slide 34: MSR Portfolio UPB
MSR PORTFOLIO UPB Total Serviced UPB $552 $546 $538 $535 $521 $531 $525 $507 $504 $506 $509 $511 $467 $400 $410 $378 $344 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Note: Servicing UPB remains unchanged following Excess IO sales as Rocket re
Slide 35: Endnotes (1)
ENDNOTES (1) Three Months Ended March 31, 2024 2023 ($ in M) (Unaudited) NET INCOME (LOSS) $291 ($411) Interest And Amortization Expense On Non-funding Debt 38 38 Provision for (Benefit From) Income Taxes 8 (5) Depreciation And Amortization 27 31 Share-based Compensation Expense 31 52 Change In Fair
Slide 36: Endnotes (1)
ENDNOTES (1) Three Months Ended March 31, 2024 2023 ($ in M) (Unaudited) TOTAL REVENUE, NET $1,384 $666 Change In Fair Value Of MSRs Due To Valuation Assumptions, Net Of Hedges (a) (220) 216 ADJUSTED REVENUE $1,163 $882 (a) Reflects changes in market interest rates and assumptions, including discoun
Slide 37: Endnotes (1)
ENDNOTES (1) (a) Reflects net income (loss) to Class A common Three Months Ended March 31, stock from pro forma exchange and conversion of corresponding shares of our Class D common shares held by non-controlling interest holders 2024 2023 as of March 31, 2024 and 2023. (b) Rocket Companies is subje
Slide 38: Endnotes
ENDNOTES (2) “Adjusted EBITDA Margin” calculated as Adjusted EBITDA divided by Adjusted Revenue. (3) We define "net client retention rate" as the number of clients that were active at the beginning of a period and which remain active at the end of the period, divided by the number of clients that we
Slide 39: Rocket Companies
@) ROCKET Companies