Transcript: Rocket Companies Q2 2026 Earnings Conference Call

Rocket Companies (NYSE: RKT ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

8 billion and an adjusted EBITDA margin of 28%, marking the most profitable quarter in four years. 3%. Strategic initiatives, including the integration of Redfin and Mr. Cooper, are ahead of schedule, contributing to market share gains and operational efficiencies.

Rocket Companies emphasized the importance of its diversified revenue model, with over 70% of revenue coming from recurring or less rate-sensitive businesses. Artificial intelligence is enhancing productivity and operating leverage, allowing loan officers to serve more clients with improved conversion rates. The company completed a significant servicing migration, enhancing its platform's efficiency and client service capabilities. 7 billion, with continued market share gains expected.

2 billion in liquidity, supporting its ability to invest and capitalize on market opportunities. Full Transcript OPERATOR Well, good day everyone and welcome to the Rocket Companies second quarter 2026 earnings conference call. Just a reminder that today's conference is being recorded. At this time, I would like to hand the call over to Ms.

Sharon Ng. Please go ahead, ma'am. Sharon Ng, Investor Relations Good afternoon everyone and thank you for joining us for Rocket Companies earnings call covering the second quarter 2026. With us this afternoon are Rocket Company CEO Varun Krishna and our President and CFO Brian Brown.

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 second quarter performance as well as our financial outlook.

This conference call includes forward-looking statements. 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.

And with that, I'll turn things over to Varun Krishna to get us started. Varun Krishna, Chief Executive Officer Good afternoon everyone and thank you for joining our second quarter 2026 earnings call. Today I'll cover the market, our second quarter results and Rocket Companies' performance. Let's go ahead and start with the market.

The industry expected a normal spring home buying season. Instead, affordability deteriorated as mortgage rates moved higher through May and June. Purchase and refinance demand, as a result, weakened during what is typically the strongest quarter of the year and industry forecasts moved lower as the quarter progressed. Simply said, it was one of the toughest spring housing markets in years.

Now, against that backdrop, Rocket Companies delivered one of its strongest quarters in recent memory. We gained market share in both purchase and refinance. We delivered our most profitable quarter in four years. We expanded adjusted EBITDA margins and integration of Redfin and Mr.

Cooper are well ahead of plan. 8 billion near the midpoint of our guidance. Adjusted EBITDA margin expanded to 28% up from 26% in the first quarter. 16.

Now our North Star is profitable market share growth and we reached a new record this quarter. 5% in Q4 of last year. 2%. This performance was not a coincidence.

It was the result of years of deliberate investment, focused execution and a business model that has fundamentally evolved. Today, more than 70% of our revenue comes from recurring or less rate sensitive businesses. Servicing provides a durable recurring revenue foundation. Purchase mortgages, home equity, personal loans and Redfin diversify us across broader parts of the housing market.

Today, Rocket Companies is the largest in both servicing and origination, and our Recapture engine connects these two things. Just as importantly, all of our businesses reinforce one another. Redfin brings clients into the Rocket ecosystem. A mortgage helps them finance one of life's biggest decisions.

Servicing keeps that relationship alive for years. Additional products allow us to continue serving these same clients as their needs evolve. Artificial intelligence strengthens every step of that journey. It improves productivity, personalization and conversion across the entire platform.

So the important point isn't that we've added new businesses. It's that we've changed the economics of the business fundamentally. Our recurring revenue base is larger, our client relationships last longer, our acquisition costs improve as these businesses reinforce one another and our operating leverage expands as AI increases productivity across this platform. This is the business we've been building, one with a stronger floor in difficult markets and significantly more upside when housing activity returns.

That's what gives us confidence that Rocket Companies' long-term earnings power is fundamentally stronger than it was just a few years ago. Now let me take a second and show you how that came to life during the second quarter. Home ownership begins long before a mortgage application. It begins with home search.

That's what makes Redfin such an important part of Rocket Companies' strategy. Historically, Rocket Companies entered the relationship when a client decided to finance a home. Today, we're increasingly entering months earlier while they're still searching. That completely changes the economics of client acquisition.

Redfin reaches roughly 50 million monthly active users with some of the highest engagement and retention in online real estate. Those users aren't casually browsing, they're actively preparing to buy or sell a home. We're turning that intent into action. Product improvements and proprietary AI models have increased lead conversion by roughly 30% over the past year, helping more clients move from searching to touring, financing and closing and when buyers are ready to finance, Rocket Mortgage is already part of the experience.

Eligible servicing clients who buy and sell through Redfin and finance with Rocket Mortgage can save up to $20,000. That's a meaningful affordability advantage in today's market. And we're seeing it translate into results. In June, mortgage leads from Redfin more than doubled year over year.

The mortgage attach rate with Redfin agents reached 47%, approaching our synergy target of 50%. Inventory is yet another differentiator. Through our Compass partnership, Redfin continues expanding unique inventory that isn't available on other major home search portals in markets like Chicago. That advantage is already driving meaningful increases in both homebuyer and mortgage leads.

Nationally, Redfin now offers approximately 25,000 exclusive listings. More inventory attracts more serious buyers. More serious buyers create more financing opportunities. That's why Redfin matters.

It allows us to build relationships earlier, convert them more effectively and increase the lifetime value of every client who enters the Rocket ecosystem. The advantages we're creating upstream continue through mortgage origination. Sales is still very much a human craft. It takes judgment, empathy and timing.

Technology doesn't replace that. It just makes our people better at it. Our loan officers provide judgment, advice and trust and they are the best in the business. Artificial intelligence only makes them better.

By removing administrative work and helping our teams focus on the right opportunities at the right time, AI allows our loan officers to spend more time helping clients and less time managing processes. We are already seeing significant impact. Compared with just one year ago, our loan officers are serving nearly 40% more clients while delivering double digit improvements in conversion at the same time. Those gains really matter today and they matter even more as the market recovers.

As mortgage volumes increase, we believe we can expand profitability faster without growing our cost structure at the same pace. This is one of the biggest structural changes happening inside Rocket Companies. AI isn't simply making people more productive. It's actually increasing the earnings power of the business through operating leverage.

We're applying that same approach across the entire company. Servicing remains one of Rocket Companies' greatest competitive advantages. It generates durable recurring revenue while creating long term relationships with millions of clients. Those relationships become more valuable every year.

They remain inside the Rocket ecosystem. During the second quarter of this year, we completed one of the largest servicing migrations in our industry's history, bringing our servicing clients onto a single platform. That milestone is about so much more than technology. It creates one foundation for how we serve clients, deploy AI and identify opportunities across the business.

Earlier this year, we launched Voice AI for inbound servicing calls. It has now handled more than 1 million calls, with more than half resolved without requiring a servicing specialist. Clients receive faster service, and our servicing experts spend more time solving the complex situations where human judgment matters most. Every interaction improves our understanding of the client and helps us identify opportunities to refinance, access home equity, purchase another home, or use another Rocket product.

That's what makes our servicing different. It isn't just a recurring revenue business. It's the engine that continuously creates future origination opportunities. Today, Rocket Companies is both the nation's largest mortgage servicer and the nation's largest mortgage lender.

Very few companies have both. That combination allows us to deepen client relationships over time instead of rebuilding them with every new transaction. So the economics are fundamentally different. Every year we keep a client, we improve the probability of serving them again, while reducing the cost of doing so.

Artificial intelligence simply accelerates that advantage by improving client experiences, strengthening recapture, and increasing productivity across the entire platform. The result is a business with a stronger recurring earnings base today and even greater operating leverage when housing activity recovers. The power of this business model is what it allows us to build on top of this platform. Because we already have trusted client relationships, servicing scale, AI capabilities, and distribution, we can expand into adjacent businesses faster and more efficiently than any company starting from scratch.

Home equity is one great example. We entered the category just four years ago. Today, Rocket Companies is the nation's largest home equity lender. Since launch, we've helped more than 250,000 homeowners access over $24 billion of their home equity.

Rocket Companies is the first independent mortgage company to lead the category. That milestone demonstrates something far larger than just success in a single product. It shows the advantage of building new businesses on top of an existing client base rather than acquiring every new customer. From the beginning, Rocket Loans tells us a very similar story.

Loan volume nearly doubled year over year during the first six months of 2026, culminating in a record month in June. More than half of those loans come from existing Rocket servicing clients. That simply reinforces the strategy we've been executing for years. Each additional product strengthens the client relationship.

Each stronger relationship creates another opportunity to serve that client. Over time, lifetime value increases while future acquisition costs decline. That's the economic engine we are building. We are not assembling a collection of products.

We're building a business where every product makes every other product more valuable. The same dynamic extends to our partner ecosystem. Through our Compass partnership, Rocket Pro brokers have originated more than $2 billion of net rate lock volume. Consumers, agents and brokers all benefit from a more connected experience.

And every additional participant strengthens that network. Those advantages compound over time. I'll close with this. The second quarter tested the housing industry.

Higher rates, reduced affordability. Demand softened. The spring market fell well short of expectations. But against that backdrop, Rocket Companies reached record market share in both purchase and refinance, delivered its most profitable quarter in four years and continued executing ahead of plan.

Those results reinforce what we've been building for years. Rocket Companies today is fundamentally different from the company we were just a few years ago. We have a larger recurring revenue base, longer client relationships, higher operating leverage, and more opportunities to serve clients throughout the homeownership journey. We can't control where mortgage rates go next quarter.

We can control the business we build quarter after quarter. We're building one with a stronger floor in difficult markets and significantly more upside when housing activity returns. Competitors may have pieces of this model. No one has integrated it the way that Rocket Companies has.

That's why we believe Rocket Companies' long-term earnings power is stronger than at any point in our history. And with that, Brian, over to you. Brian Brown, President, Chief Financial Officer & Treasurer Thank you, Varun, and good afternoon, everyone. Today I'll discuss our second quarter results and the record market share gains we delivered in a challenging market.

I'll also cover capital position and integration progress. I'll close with our outlook for the third quarter. Let's start with the second quarter's results. 8 billion, near the midpoint of our guidance range.

We generated $47 billion in total net rate lock volume and $49 billion in total closed loan volume. Gain-on-sale margin, excluding correspondent, was 311 basis points. That's compared to 322 basis points in the first quarter. Adjusted EBITDA was $766 million, representing an adjusted EBITDA margin of 28%, up from 26% in the first quarter.

15 in the first quarter, making this our most profitable quarter in four years. Our market share gains in the second quarter were impressive. In fact, we achieved our highest ever quarterly market share in both purchase and refinance. 3% in the second quarter.

This represents a 13% increase in purchase market share from the fourth quarter and a 17% increase in refinance market share. These results reflect the structural advantages of our business model. First, a diversified revenue base that provides stability with built-in upside. Second, unique assets, including the industry's largest servicing portfolio and Redfin's purchase funnel that drives share gains at a very low cost of acquisition.

Third, a cost advantage across origination and servicing where scalable capacity and expense synergies keep fixed costs flat while volume grows. Let me unpack each of these a little more, starting with our balanced revenue model. More than 70% of our revenue is recurring or less rate sensitive. Servicing fee income and Rocket Money subscription revenue are recurring.

The purchase business, cash-out refinance, home equity loans as well as the Redfin business operate in a large and less rate-sensitive category. The remaining 30% includes rate-and-term refinance, which carries the most rate exposure, but it's also our greatest source of upside when rates fall. And the good news is we have over $300 billion of origination capacity that's primed to capture this upside in Q2. This balanced business model drove our operating results.

Servicing generated $1 billion of steady cash flow while less rate-sensitive products, including purchase, cash-out refinance and home equity loans, contributed to the majority of gain-on-sale revenue. Let's turn to our unique assets: the industry's largest servicing portfolio connected to a powerful recapture engine and Redfin's purchase top of funnel. These assets are hard to replicate, and they allow us to acquire clients at a fraction of the industry's average cost. Because these clients are already in our ecosystem, those assets delivered in the second quarter.

On the purchase side, the Redfin integration is paying dividends.