Rocket Companies, Inc. 2026 Q3 Earnings Call

Sharon, please go ahead. Good afternoon, everyone, and thank you for joining us for Rocket Companies earnings call covering the third quarter 2026.

With us this afternoon are Rocket Companies CEO Varun Krishna, and our President and CFO Brian Brown. Earlier today, we issued our third quarter earnings release, which is available on our website at rocketcompanies.com under Investor Info. Also available on our website is an investor presentation. Before I turn things over to Varun, let me quickly go over our disclaimers. On today's call, we provide you with information regarding our third quarter performance as well as our financial outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and the assumptions we mention today.

We encourage you to consider the risk factors contained in our SEC filings for a detailed discussion of these risks and uncertainties. We undertake no obligation to update these statements as a result of new information or further events, except as required by law. This call is being broadcast online and is accessible on our investor relations website. A recording of the call will be posted later today. Our commentary today will also include non-GAAP financial measures. Reconciliations between GAAP and non-GAAP metrics for reported results can be found in our earnings release issued earlier today, as well as in our filings with the SEC. With that, I'll turn things over to Varun Krishna to get us started.

Varun? Good afternoon and thank you for joining our third quarter earnings call.

On today's call, I'll do three things, walk you through the market, share our results, and show you what three years of rebuilding Rocket has brought us. Here's the truth about tough markets. They don't lie. They strip everything down to what's real. Who has the capital to keep investing? Whose model works in any cycle? Who can win their clients back, and who can move fast when it counts? This quarter did all of this. From June to September, the 10-year Treasury rose 80 basis points to 5.3%, the highest in 24 years. The 30-year mortgage rate rose more than 80 basis points to 7.3%. On an annualized basis, existing home sales fell below 4 million. Refinance applications fell more than 50% from a year ago. Total applications declined four straight weeks to close the quarter.

For American families trying to buy a home, the math went from hard to punishing. In that exact market, we delivered. Adjusted revenue of $2.6 billion, near the midpoint of our guidance. Share gains in purchase and refinance quarter-over-quarter and year-over-year. Adjusted EBITDA of $748 million with margins expanding to 29%. This was our highest margin in nearly five years and our fourth straight quarter of expansion since we closed the Mr. Cooper transaction. Adjusted net income of $419 million, $0.15 of adjusted EPS. Let me say that differently. In one of the hardest mortgage markets in a generation, we grew share, expanded margins, and earned $0.15 of adjusted EPS. Why does Rocket win? It is no accident. Three years ago, we made a decision. Rebuild this company at every single level. An ecosystem that serves clients from home search through servicing.

A technology platform built for scale, speed, and efficiency. Distribution that reaches homebuyers and homeowners everywhere. A fortress balance sheet, now over $11 billion in liquidity, so we can keep investing while others pull back. That combination puts Rocket squarely in a category of one. Number 1 in purchase, refinance, home equity, and servicing. Let me take you back to late 2023, the last time rates were this high. Back then, we were unprofitable. Today, in a market just as brutal, we earned $0.15 of adjusted EPS and grew market share. Same environment, different Rocket, durable through cycles. The question is, where does this durability come from? It comes from two things. First, a business model built for any cycle. Second, technology that drives better, faster, and a more affordable experience for our clients. Let me talk about the model first.

More than 70% of our revenue this year comes from recurring or less rate sensitive sources. Servicing fees, subscriptions, purchase, cash out refinance, home equity. Let me take you inside two of them, purchase and servicing. Purchase starts with Redfin and every home search begins there. Inside every listing, there is a path to Rocket Mortgage. Buyers meet us before they ever make an offer. The results, visitors who click through to start a purchase mortgage transaction are up 50% year-over-year. Redfin's contribution to our refinance leads also more than doubled this quarter from a year ago. Compass simply extends that same playbook and delivers what buyers want most, homes and the agents who sell them. Cumulative unique listings are now nearly 40,000, up from roughly 25,000 last quarter. Homes you cannot find anywhere else.

Rocket Pro net rate lock volume through Compass has passed $3 billion since February, up 50% from last quarter. Then there is servicing, our ballast. More than $1 billion a quarter in servicing fees. More than $4 billion a year. That is triple where we were three years ago. That is recurring cash flow in any rate environment, revenue that shows up whether rates are 4% or 8%. Here is what makes it compound. Because we know these clients, we are first in line when they are ready for their next loan. In Q3, recapture across the combined portfolio hit the highest level in our history. We recapture at a rate multiple times higher than the industry. On our platform, servicing is not just an annuity, it is a growth engine. Home equity extends the advantage.

There's a record $12 trillion in tappable home equity in this country, and home equity loans let owners unlock cash without giving up their first-lien rate. That's resonating with our existing client base. Year-to-date, about two-thirds of our home equity clients also have their first mortgage serviced by Rocket. Our second advantage is technology. I'll be very direct with this. This is where the industry's future gets decided. For most of this industry's history, a mortgage moved at the speed of paperwork and business hours. AI removes both limits. How does technology win? Four proof points from this quarter. First is credit pulls. We reimagined how credit gets pulled across every digital lead, purchase and refinance, with AI agents guiding the client all the way through. On nearly 20% of our direct-to-consumer volume, AI completed that step before the client ever spoke to a loan officer.

A year ago, that number was zero. Think about what that means. Our loan officers now spend their time with clients who are ready to move forward. Second, the fully digital refinance. We threw out the form entirely and rebuilt the experience around agents. Clients can choose to pull their credit, see their loan options, and lock their rate without ever speaking to a loan officer. In Q3, digital was more than 40% of all direct-to-consumer refinance applications, and digital leads converted at four times the rate of every other channel. Same demand, more growth. Third is voice. Our AI voice agents are now integral to how we serve every client. The platform handles 65% of inbound servicing calls and resolves more than half of them on its own. It's natural, personal, and always on. Clients get answers in seconds, and our people spend their time where humans excel.

Fourth is the agentic future. Consumers are starting to shop with their own AI agents, like Meta's Muse, that compare price, speed, and ratings across lenders, giving people more transparency and control. We saw that coming. Over the past 18 months, we've built the APIs and protocols those agents need to complete the mortgage process with Rocket end-to-end. Here's the thing about agents. They don't care about your brand. They care about two things, the best price and the easiest close. We show up well as Rocket in both. Put it all together. Rocket is faster, simpler, and more affordable, open 24/7 across every channel, from AI agents to in-person. Our structural cost advantage flows straight back to clients through better rates and offers like our preferred pricing bundle. So where do we go from here? I'll close where I started. Tough markets don't lie. They reveal what's real.

This quarter revealed a company that delivered revenue near the midpoint of guidance, expanded margins for the fourth straight quarter, and took share in purchase and refinance in one of the hardest markets this industry has ever seen. Three years ago, at these rates, we lost money. Today, we make it. The rates didn't change. We did. We built Rocket to be the strongest ship in rough water. We're built to grow in any rate environment. We are not waiting for the market. We're taking the reins. With that, let me hand it over to Brian.