Rocket beats earnings guidance with strongest quarterly profit in four years

Rocket Companies reported its most profitable quarter in four years as artificial intelligence initiatives, a larger servicing portfolio and recent acquisitions helped the Detroit-based firm grow market share despite a choppy mortgage backdrop.

The Detroit-based company reported net revenue of $2.94 billion for the quarter ending March 31, up from $1.1 billion in the same period a year earlier. Adjusted revenue rose to $2.82 billion, up from $1.36 billion in Q1 2025, and exceeding the high end of the company’s guidance range.

“This quarter shows the model is working,” CEO Varun Krishna said during the company’s earnings call. “We delivered a strong performance in a volatile market. … Rocket is no longer the same company that it was three years ago. The shape of our business has not just changed — it has fundamentally evolved.

“We are not waiting for the market to normalize. We are building a company that can win in the market we have.”

Adjusted net income totaled $422 million, compared with $80 million in the first quarter of 2025, while adjusted EBITDA increased to $738 million, up from $169 million. Diluted earnings per share were 10 cents, compared with a loss of 8 cents a year ago.

“In Q1, we beat guidance, expanded EBITDA margins and grew market share in both refinance and purchase,” Rocket president and chief financial officer Brian Brown said during Thursday’s earnings call, crediting the record quarter to margins that expanded to 26%.

Rocket generated $49.4 billion in total net rate lock volume during the quarter and $44.7 billion in closed mortgage origination volume. Excluding correspondent lending, the company originated $37.8 billion in closed loan volume with a gain-on-sale margin of 3.22%.

The company generated more than $1 billion in servicing fee income during the quarter, supported by a servicing portfolio that reached $2.1 trillion in unpaid principal balance across 9.4 million loans as of March 31.

Total liquidity stood at $9.4 billion, including $2.7 billion in cash and cash equivalents. The company also had access to $2.3 billion in undrawn lines of credit and $4.4 billion in available mortgage servicing rights and advance lines of credit, its press release noted.

“Closed loan volume from our servicing portfolio hit an all-time high, with 54% of refinance closings coming from existing service clients,” Brown added.

Rocket’s direct-to-consumer segment, Rocket Mortgage, generated $2.23 billion in total revenue during the first quarter, up from $793 million a year earlier. Adjusted revenue rose to $2.11 billion from $1.05 billion, while contribution margin increased to $1.15 billion from $407 million.

Brown provided an update on Rocket’s origination capacity. In 2024, Rocket reported that it had the capacity to originate up to $150 billion without adding fixed costs.

“We now have up to $300 billion of origination capacity with several hundred fewer production team members than we had back in 2024. We’ve done this two years ahead of schedule, while actively reducing fixed costs through synergies,” Brown said.

For Q2 2026, Rocket forecasts adjusted revenue between $2.7 billion and $2.9 billion.

Key Q1 accomplishments

Rocket said integration efforts tied to its acquisition of Mr. Cooper are progressing ahead of schedule. More than half of the servicing portfolio has been migrated to a unified platform, and the company said it expects to achieve its planned $400 million in expense synergies by the end of 2026, a year earlier than originally projected.

“Integration is not putting logos next to each other; it is making the company work better, faster and with more force,” Krishna told investors on Thursday. “In 2025, we built the foundation, we expanded the ecosystem, we strengthened the platform, we widened the top of the funnel, we improved distribution. In 2026, we are bringing it all together across search, origination, servicing, data, and of course, artificial intelligence.”

The company also highlighted investments in AI-powered prospecting tools for loan officers. Rocket said the technology now handles top-of-funnel prospecting and outreach tasks that previously consumed about two hours per day for LOSs, helping drive double-digit increases in conversion rates. The company said its latest AI initiatives added an incremental $1 billion in monthly volume during the quarter, matching gains from the previous quarter.

Rocket’s home equity and jumbo loan businesses more than doubled year over year in the quarter, while Redfin’s monthly active users rose 3.3% in March from a year earlier. The company said digital purchase mortgage leads tied to Redfin more than tripled since Rocket acquired the platform in July 2025.

Rocket also highlighted several technology and distribution initiatives during the quarter, including the February launch of Rocket Pro’s “Power Play” program, which offers mortgage brokers up to 100 basis points in pricing credits through a partnership with Compass.

The company also expanded use of its Rocket Pro Navigate broker platform and Jupiter loan origination system, which is available to brokers at no cost.