Rocket Companies Reports $212.4 Million Net Loss in Q1 2025 Amid Strategic Changes

Rocket Companies, Inc. reported a net loss of $212.4 million for the first quarter of 2025, a significant decline from a net income of $290.7 million in the same period last year. The company's total revenue for the quarter was $1.04 billion, down from $1.38 billion in the prior year, reflecting a decrease in loan servicing income and increased operational expenses. The loss attributable to Rocket Companies was $10.4 million, compared to a profit of $16.2 million in the first quarter of 2024. The company’s diluted loss per share was $(0.08), compared to earnings of $0.11 per share in the previous year.

In terms of operational performance, Rocket Companies originated $21.6 billion in residential mortgage loans during the quarter, marking a 7% increase from $20.2 billion in the same period last year. The gain on sale of loans, net, increased by 10% to $771.6 million, driven by a rise in net rate lock volume. However, the company experienced a loss in loan servicing income, reporting a net loss of $48.5 million, a stark contrast to the $402.3 million in income reported in the previous year, primarily due to unfavorable changes in the fair value of mortgage servicing rights (MSRs).

Strategically, Rocket Companies is undergoing significant changes, including the collapse of its Up-C structure and two major acquisitions: Redfin and Mr. Cooper. The Up-C Collapse, finalized on March 9, 2025, aims to simplify the company's organizational structure. The acquisition of Redfin, a residential real estate brokerage, and Mr. Cooper, the largest residential mortgage servicer in the U.S., are expected to enhance Rocket's market position and operational capabilities. Both transactions are anticipated to close in 2025, pending regulatory approvals.

Operationally, Rocket Companies reported a total serviced UPB of $600.4 billion, an increase from $510.7 billion a year earlier, with the number of loans serviced rising to 2.8 million. The company also saw a 41% increase in paying subscribers for its Rocket Money service, reflecting a growing customer base. However, the total equity of the company decreased slightly to $8.6 billion, primarily due to special dividends and distributions made during the period.

Looking ahead, Rocket Companies remains focused on integrating its recent acquisitions and enhancing its service offerings. The company anticipates that the ongoing changes in the housing market, including fluctuating interest rates and housing affordability challenges, will continue to impact its operations. Management expressed optimism about the potential for growth through strategic acquisitions and the expansion of its product offerings, aiming to leverage its strong brand recognition in the fintech space.