What Rocket Companies (RKT) Said on Its Q3 Earnings Call

Key Points

• Strong Q3 performance despite a difficult mortgage market: Rocket Companies reported $2.6 billion in adjusted revenue, $748 million in adjusted EBITDA and a record-near-five-year 29% EBITDA margin. The company gained purchase and refinance market share even as mortgage rates rose and applications weakened.
• Growth is becoming less dependent on refinancing: More than 70% of year-to-date revenue came from recurring or less rate-sensitive sources, while purchase lending, broker partnerships and record home-equity volume supported results. Rocket’s purchase market share increased to nearly 6.5%, and refinance share rose to 15.5%.
• Rocket expects a tougher fourth quarter but is cutting costs: The company projects Q4 adjusted revenue of $2.1 billion to $2.3 billion and expects refinance activity to fall nearly 50% from Q3. It has realized $300 million in annualized Mr. Cooper synergies, expects another $100 million in Q4, and ended the quarter with $11.4 billion in liquidity.

Rocket Companies NYSE: RKT reported third-quarter 2026 adjusted revenue of $2.6 billion and adjusted EBITDA of $748 million, as the mortgage lender said it gained share in purchase and refinance lending despite higher mortgage rates and weaker industry application activity.

Adjusted EBITDA margin reached 29%, up from 28% in the prior quarter and the company’s highest level in nearly five years, according to President and CFO Brian Brown. Adjusted net income was $419 million, or $0.15 per diluted share. On a GAAP basis, Rocket reported $3.3 billion in revenue and net income of $709 million, or $0.25 per diluted share.

CEO Varun Krishna said the quarter reflected the company’s efforts over the past three years to build a business less dependent on rate-sensitive refinancing activity. He said more than 70% of Rocket’s revenue this year has come from recurring or less rate-sensitive sources, including servicing fees, subscriptions, purchase lending, cash-out refinancings and home equity products.

Mortgage Market Pressures Persisted

Rocket cited a difficult lending backdrop during the quarter. Krishna said the 10-year Treasury yield rose 80 basis points from June through September to 5.3%, while the 30-year mortgage rate increased by more than 80 basis points to 7.3%. Existing-home sales fell below an annualized rate of 4 million, while refinance applications declined more than 50% from a year earlier, he said.

Brown said the Mortgage Bankers Association’s application index fell in 10 of the quarter’s 13 weeks and that applications were down 23% from the second-quarter average. Despite those conditions, Rocket generated $40.4 billion in net rate-lock volume and $43.6 billion in closed loan volume.

Based on its estimates, Rocket’s purchase market share approached 6.5% in the third quarter, compared with 6.2% in the second quarter. Its refinance share reached 15.5%, compared with 14.3% in the prior quarter.

Purchase Distribution and Home Equity Supported Growth

Rocket attributed its purchase growth to its local loan officer program, broker platform and real estate partnerships. Brown said Rocket Local, the company’s network of in-market loan officers, increased volume by more than 30% year over year and has grown to more than 400 loan officers in major metropolitan markets.

The company also said one in five of its purchase clients is represented by a Redfin or Compass agent. Krishna said visitors clicking from Redfin to start a purchase mortgage transaction increased 50% year over year, while Redfin’s contribution to Rocket refinance leads more than doubled.

Compass-related Rocket Pro net rate-lock volume surpassed $3 billion since February and was up 50% from the previous quarter, according to Krishna. The company has also added roughly 200 Rocket Pro broker partners in recent months, representing an estimated $12 billion in potential annual volume, Brown said.

In refinance, Rocket said home equity lending set a volume record as homeowners sought to access home values without replacing existing first-lien mortgages. About two-thirds of Rocket’s year-to-date home equity clients also have their first mortgage serviced by Rocket, Krishna said.

Recapture rates across the combined servicing portfolio reached a record level in the quarter. Brown said recapture on the legacy Mr. Cooper portfolio reached 60%, compared with the company’s stated goal of 65% by the end of 2027.

Margins, Synergies and Liquidity

Gain-on-sale margin excluding correspondent lending increased to 333 basis points from 311 basis points in the second quarter. Direct-to-consumer gain-on-sale margin rose to 431 basis points from 413 basis points. Brown said the increase reflected a larger mix of higher-margin home equity loans.

Total expenses were $2.3 billion, down $175 million from the prior quarter. Rocket said it had realized $300 million of annualized expense synergies from its Mr. Cooper transaction through the end of the third quarter and expects to realize the remaining $100 million in the fourth quarter, a year ahead of its original timeline.

Beyond those savings, Brown said the company sees an additional $100 million in annual savings that it expects to realize in the first half of 2027. He also said Rocket is reviewing vendor costs, third-party expenses, marketing efforts and excess capacity as it adjusts to the current rate environment.

Rocket ended the quarter with $11.4 billion in liquidity, including $2.7 billion in cash. Brown said net corporate leverage was below one turn.

Fourth-Quarter Outlook

For the fourth quarter, Rocket expects adjusted revenue between $2.1 billion and $2.3 billion. At the midpoint of that range, the company expects total expenses of $2.05 billion, including $110 million of intangible amortization, $80 million of stock-based compensation and $10 million of one-time integration costs. Excluding those items, expenses are expected to be $1.85 billion, down $165 million from the third quarter.

Brown said the company expects the refinance market to decline by nearly half from the third quarter, potentially leaving overall mortgage activity near multidecade lows. The company’s outlook assumes continued market-share gains, supported by purchase lending, cash-out refinancing and second-lien home equity products.

“The fourth quarter will be harder still,” Brown said. “We’re ready for it.”

About Rocket Companies (NYSE:RKT)

Rocket Companies, Inc is a Detroit-based financial technology company that operates a portfolio of consumer finance and real estate businesses. Its platform is designed to simplify the homeownership process through digital applications, automated workflows and online customer support.

The company's principal business is Rocket Mortgage, a residential mortgage lender and servicer offering home purchase, refinance and home equity products. Its broader portfolio includes Rocket Homes, a real estate services platform; Rocket Money, a personal finance app that helps consumers manage subscriptions, budgets and bills; Rocket Loans, which provides personal loans; and Rocket Pro, which supports mortgage brokers and other partners.

Rocket Companies traces its history to 1985, when Dan Gilbert founded Rock Financial.

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