Technology

Rocket Companies Announces Fourth Quarter and Full Year 2023 Results

Published

7 months ago

February 22, 2024

Generated Q4’23 net revenue of $694 million and adjusted revenue of $885 million. Adjusted revenue exceeded the high end of guidance range, and year-over-year growth accelerated for a second quarter in a rowReported full year 2023 net revenue and adjusted revenue of $3.8 billionReduced cost structure by nearly 20% in 2023, following a nearly 25% cost reduction in 2022Reported Q4’23 GAAP net loss of $233 million, or $(0.09) per GAAP diluted loss per share and adjusted net loss of $6 million or $0.00 per adjusted diluted loss per shareDelivered adjusted EBITDA profitability for the full year and in Q4’23, for the third quarter in a row

DETROIT, Feb. 22, 2024 /PRNewswire/ — Rocket Companies, Inc. (NYSE: RKT) (“Rocket Companies” or the “Company”), the Detroit-based fintech platform company including mortgage, real estate and personal finance businesses, today announced results for the fourth quarter and full year ended December 31, 2023.

“I’m proud of our team members for consistent execution amid one of the most challenging years for mortgage originations in three decades. We demonstrated accelerating year-over-year revenue growth in the quarter, and positive adjusted EBITDA for the third quarter in a row. We once again made strides in market share, as our purchase and refinance share grew by double-digits in 2023,” said Varun Krishna, CEO and director of Rocket Companies. “We enter 2024 with momentum and Rocket is well-positioned to fulfill its strategy of AI-fueled home ownership. AI is being deployed across the organization to deliver industry-best client experiences, with the aim to achieve scaled growth in market share, revenue, and profitability.”

Fourth Quarter 2023 Financial Summary1

ROCKET COMPANIES

($ in millions, except per share amounts)

Q4-23

Q4-22

FY 23

FY 22

(Unaudited)

Total Revenue, net

$ 694

$ 481

$ 3,799

$ 5,838

Total Expenses

$ 937

$ 986

$ 4,202

$ 5,097

GAAP Net (Loss) Income

$ (233)

$ (493)

$ (390)

$ 700

Adjusted Revenue

$ 885

$ 683

$ 3,770

$ 4,628

Adjusted Net Loss

$ (6)

$ (197)

$ (143)

$ (137)

Adjusted EBITDA

$ 55

$ (204)

$ 67

$ 59

GAAP Diluted (Loss) Earnings Per Share

$ (0.09)

$ (0.14)

$ (0.15)

$ 0.28

Adjusted Diluted Loss Per Share

$ 0.00

$ (0.10)

$ (0.07)

($ in millions)

Q4-23

Q4-22

FY 23

FY 22

Select Metrics

(Unaudited)

Closed loan origination volume

$ 17,261

$ 19,030

$ 78,712

$ 133,129

Gain on sale margin

2.68 %

2.17 %

2.63 %

2.82 %

Net rate lock volume

$ 16,055

$ 15,012

$ 78,649

$ 117,757

1 “GAAP” stands for Generally Accepted Accounting Principles in the U.S. Please see the sections of this document titled “Non-GAAP Financial Measures” and “GAAP to non-GAAP Reconciliations” for more information on the Company’s non-GAAP measures and its share count. Certain figures in the tables throughout this document may not foot due to rounding.

Fourth Quarter and Full Year 2023 Financial Highlights

During the fourth quarter of 2023:

Generated total revenue, net of $694 million and GAAP net loss of $233 million, or a loss of 9 cents per diluted share. Generated total adjusted revenue of $885 million and adjusted net loss of $6 million, or an adjusted loss of 0 cents per diluted share.
Rocket Mortgage generated $17 billion in mortgage origination closed loan volume.
Gain on sale margin was 2.68%, a 51 bps increase over the same period the prior year.
Total liquidity was approximately $9.0 billion, as of December 31, 2023, which includes $1.1 billion of cash on the balance sheet, and $2.5 billion of corporate cash used to self-fund loan originations, $3.4 billion of undrawn lines of credit, and $2.0 billion of undrawn MSR lines of credit.
Servicing portfolio unpaid principal balance, which includes subserviced loans, was $509 billion at December 31, 2023. As of December 31, 2023, our servicing portfolio includes nearly 2.5 million loans serviced. The portfolio generates approximately $1.4 billion of recurring servicing fee income on an annualized basis.

During the full year of 2023:

Generated total revenue, net of $3.8 billion and GAAP net loss of $390 million, or a loss of 15 cents per diluted share. Generated total adjusted revenue of $3.8 billion and adjusted net loss of $143 million, or an adjusted loss of 7 cents per diluted share.
Rocket Mortgage generated $78.7 billion in mortgage origination closed loan volume and gain on sale margin of 2.63%.
Purchase market share grew by 14%, and refinance market share grew by 10% from 2022 to 2023.
We executed a disciplined and prudent approach to cost management. After cutting nearly 25% of our cost base in 2022, we further reduced expenses in 2023 by nearly 20%, through technology-led productivity gains, prioritization efforts and organizational right-sizing.
Rocket Mortgage net client retention rate was 97% for the 12 months ended December 31, 2023. There is a strong correlation between this metric and client lifetime value. We believe our net client retention rate is unmatched among mortgage companies and on par with some of the best performing subscription business models in the world.

Company Highlights

Automation and AI are helping to deliver higher accuracy and operational efficiency at scale in mortgage underwriting. In December, nearly two-thirds of income verifications were automated without an underwriter needing to intervene, a 5-fold improvement compared to 15 months prior. This technology has been extended to our broker partners, to further complement the offerings we provide to help them grow their business with Rocket.
In 2023, we facilitated 3.1 million servicing client interactions. Our servicing calls and chats are increasingly powered by AI, providing clients with smart, conversational, self-service experiences 24/7. Approximately 70% of our servicing calls and chats are self-serve without the need of team member assistance, with escalation to team members reserved for instances requiring the human touch. We have seen a continuing trend of lower call volume in servicing, as our AI-powered digital experiences become the preferred choice for our clients.
Home equity loans, ONE+ and BUY+ were innovative products that we introduced in 2023 which have resonated strongly with new and existing clients. Notably, the vast majority of clients who came to us through home equity loans, ONE+ or BUY+ were new clients who did not already have a loan with us. These innovative solutions, along with our purchase and refinance products, attract new clients to the Rocket ecosystem, allowing us to deliver great client service not only for the first time, but for their entire lives as homeowners.
In January and February, Rocket received numerous accolades across multiple industry outlets. Rocket Mortgage and Rocket Homes were honored on the HousingWire Tech 100 list in the Mortgage and Real Estate categories. Rocket Mortgage also received recognition from USA Today, Motley Fool and Nerdwallet.
In December, Rocket Money was the #1 app for daily downloads in the Apple App Store Finance category and reached #6 in the top iOS charts. Rocket Money also received recognition across numerous media outlets, including Business Insider, Bankrate and ZDNet. Rocket Money empowers consumers to take control of their financial future, amassing more than 5 million members and saving consumers $1 billion of cash over the last five years.
Rocket Homes launched its iOS app in Apple CarPlay and Apple Vision Pro, enabling consumers to use new modalities such as voice and virtual reality to search and discover their next dream home. In December, Rocket Homes launched an iOS app for Apple CarPlay, bringing the home search and discovery experience to the infotainment screens of cars, trucks and SUVs. In February, Rocket Homes launched the first home search app available for Apple Vision Pro, delivering an immersive experience that blends physical and virtual worlds to view and tour homes.
On January 4, 2024, the Company announced that Jonathan Mildenhall was named the first Chief Marketing Officer (CMO) of Rocket Companies. Mildenhall, previously CMO at Airbnb, and prior to that spent eight years at The Coca-Cola Company, brings 35 years of experience building best-in-class, iconic consumer brands. In this new role, Mildenhall will be responsible for reimagining the Rocket brand and creating a unified voice for businesses under the Rocket Companies umbrella.
The Board of Directors of Rocket Companies, upon the recommendation of the Nominating and Governance Committee of the Board, voted to expand the Board to nine directors and fill the newly created vacancies by appointing Varun Krishna, the Company’s Chief Executive Officer, and Alex Rampell, on December 21, 2023 and February 1, 2024, respectively. Rampell currently serves as General Partner at Andreessen Horowitz and serves on the boards of several Andreessen Horowitz portfolio companies.

Rocket Corporate Responsibility: For-More-Than-Profit

The Rocket Mortgage Classic recently announced that it raised $1.6 million to support local Detroit nonprofit organizations through the 2023 tournament. Since 2019, the Rocket Mortgage Classic has invested more than $8.4 million into local charitable organizations, including $4.3 million in contributions to the event’s landmark “Changing the Course” initiative to connect Detroit residents to high-speed internet, digital devices and digital training. The Rocket Mortgage Classic was also named the recipient of the PGA TOUR’s “Fair Way Award” for the second time. The award recognizes tournaments that excel at diversity, inclusion and social responsibility programs promoting equity, fairness, respect and openness in the local community.
In October, the Rocket Community Fund, a partner company, along with Detroit Mayor Mike Duggan and the United Community Housing Coalition announced that 104 Detroit families were able to become homeowners through the Make It Home program in 2023, bringing the program’s total to 1,500 families that have avoided tax foreclosure-related displacement since the program’s launch in 2017. Make It Home enables eligible Detroiters occupying tax-foreclosed houses to become homeowners, rather than face eviction.
In December, the Rocket Community Fund and the Legal Aid Society of Cleveland announced a $1.3 million investment to create the Cleveland Eviction Defense Fund. This strategic partnership combats housing instability and displacement by providing comprehensive legal representation, advocacy and emergency rental assistance to Cleveland residents. The Rocket Community Fund’s commitment to rental assistance is based, in part, on findings from Neighbor to Neighbor, the organization’s flagship community outreach and engagement program.

First Quarter 2024 Outlook2

In Q1 2024, we expect adjusted revenue of between $925 million to $1,075 million.

2 Please see the section of this document titled “Non-GAAP Financial Measures” for more information.

Direct to Consumer

In the Direct to Consumer segment, clients have the ability to interact with the Rocket Mortgage app and/or with the Company’s mortgage bankers. The Company markets to potential clients in this segment through various brand campaigns and performance marketing channels. The Direct to Consumer segment derives revenue from originating, closing, selling and servicing predominantly agency-conforming loans, which are pooled and sold to the secondary market. The segment also includes title insurance, appraisals and settlement services complementing the Company’s end-to-end mortgage origination experience. Servicing activities are fully allocated to the Direct to Consumer segment and are viewed as an extension of the client experience. Servicing enables Rocket Mortgage to establish and maintain long term relationships with our clients, through multiple touchpoints at regular engagement intervals.

DIRECT TO CONSUMER3

($ in millions)

Q4-23

Q4-22

FY 23

FY 22

(Unaudited)

Sold loan volume

$ 10,360

$ 11,919

$ 43,598

$ 84,142

Sold loan gain on sale margin

4.04 %

4.03 %

3.86 %

4.14 %

Revenue, net

$ 484

$ 325

$ 2,989

$ 4,780

Adjusted Revenue

$ 675

$ 527

$ 2,960

$ 3,569

Contribution margin

$ 264

$ 46

$ 1,036

$ 1,051

Partner Network

The Rocket Professional platform supports our Partner Network segment, where we leverage our superior client service and widely recognized brand to grow marketing and influencer relationships, and our mortgage broker partnerships through Rocket Pro TPO (“third party origination”). Our marketing partnerships consist of well-known consumer-focused companies that find value in our award-winning client experience and want to offer their clients mortgage solutions with our trusted, widely recognized brand. These organizations connect their clients directly to us through marketing channels and a referral process. Our influencer partnerships are typically with companies that employ licensed mortgage professionals that find value in our client experience, technology and efficient mortgage process, where mortgages may not be their primary offering. We also enable clients to start the mortgage process through the Rocket platform in the way that works best for them, including through a local mortgage broker.

PARTNER NETWORK3

($ in millions)

Q4-23

Q4-22

FY 23

FY 22

(Unaudited)

Sold loan volume

$ 8,460

$ 9,132

$ 34,893

$ 60,499

Sold loan gain on sale margin

1.16 %

0.95 %

1.05 %

Revenue, net

$ 110

$ 71

$ 439

$ 639

Adjusted Revenue

$ 110

$ 71

$ 439

$ 639

Contribution margin

$ 61

$ 12

$ 198

$ 276

3 We measure the performance of the Direct to Consumer and Partner Network segments primarily on a contribution margin basis. Contribution margin is intended to measure the direct profitability of each segment and is calculated as Adjusted Revenue less directly attributable expenses. Directly attributable expenses include salaries, commissions and team member benefits, general and administrative expenses, and other expenses, such as direct servicing costs and origination costs. A loan is considered “sold” when it is sold to investors on the secondary market. See “Summary Segment Results” section later in this document and the footnote on “Segments” in the “Notes to Consolidated Financial Statements” in the Company’s forthcoming filing on Form 10-K for more information.

Balance Sheet and Liquidity

Total available cash was $3.6 billion as of December 31, 2023, which includes $1.1 billion of cash and cash equivalents, and $2.5 billion of corporate cash used to self-fund loan originations. Additionally, we have access to $3.4 billion of undrawn lines of credit, and $2.0 billion of undrawn MSR lines of credit from financing facilities, for a total liquidity position of $9.0 billion as of December 31, 2023.

BALANCE SHEET HIGHLIGHTS

($ in millions)

December 31, 2023

December 31, 2022

(Unaudited)

Cash and cash equivalents

$ 1,108

$ 722

Mortgage servicing rights (“MSRs”), at fair value

$ 6,440

$ 6,947

Funding facilities

$ 3,367

$ 3,549

Other financing facilities and debt

$ 4,237

$ 4,701

Total equity

$ 8,302

$ 8,476

Fourth Quarter and Full Year Earnings Call

Rocket Companies will host a live conference call at 4:30 p.m. ET on February 22, 2024 to discuss its results for the quarter ended December 31, 2023. A live webcast of the event will be available online by clicking on the “Investor Info” section of our website. The webcast will also be available via rocketcompanies.com.

A replay of the webcast will be available on the Investor Relations site following the conclusion of the event.

Consolidated Statements of Income (Loss)

($ In Thousands, Except Per Share Amounts)

Three Months Ended December 31,

Years Ended December 31,

2023

2022

2023

2022

(Unaudited)

Revenue

Gain on sale of loans

Gain (loss) on sale of loans excluding fair value of
MSRs, net

$ 187,832

$ (7,498)

$ 973,960

$ 1,166,770

Fair value of originated MSRs

242,305

288,281

1,092,332

1,970,647

Gain on sale of loans, net

430,137

280,783

2,066,292

3,137,417

Loan servicing (loss) income

Servicing fee income

347,743

370,633

1,401,780

1,458,637

Change in fair value of MSRs

(357,845)

(407,126)

(700,982)

185,036

Loan servicing (loss) income, net

(10,102)

(36,493)

700,798

1,643,673

Interest income

86,079

85,101

327,448

350,591

Interest expense on funding facilities

(44,905)

(35,812)

(206,588)

(166,388)

Interest income, net

41,174

49,289

120,860

184,203

Other income

232,597

187,213

911,319

873,200

Total revenue, net

693,806

480,792

3,799,269

5,838,493

Expenses

Salaries, commissions and team member benefits

484,793

519,024

2,257,291

2,797,868

General and administrative expenses

207,651

196,342

802,865

906,195

Marketing and advertising expenses

142,823

175,413

736,676

945,694

Depreciation and amortization

26,593

23,987

110,271

94,020

Interest and amortization expense on non-funding
debt

38,365

38,333

153,386

153,596

Other expenses

36,486

33,111

141,677

199,209

Total expenses

936,711

986,210

4,202,166

5,096,582

(Loss) income before income taxes

(242,905)

(505,418)

(402,897)

741,911

Benefit from (provision for) income taxes

10,211

12,763

12,817

(41,978)

Net (loss) income

(232,694)

(492,655)

(390,080)

699,933

Net loss (income) attributable to non-controlling
interest

222,059

475,039

374,566

(653,512)

Net (loss) income attributable to Rocket Companies

$ (10,635)

$ (17,616)

$ (15,514)

$ 46,421

(Loss) earnings per share of Class A common stock:

Basic

$ (0.08)

$ (0.14)

$ (0.12)

$ 0.39

Diluted

$ (0.09)

$ (0.14)

$ (0.15)

$ 0.28

Weighted average shares outstanding

Basic

133,597,434

121,751,798

128,641,762

120,577,548

Diluted

1,987,457,044

121,751,798

1,980,523,690

1,971,620,573

Consolidated Balance Sheets

($ In Thousands)

December 31,
2023

December 31,
2022

Assets

(Unaudited)

Cash and cash equivalents

$ 1,108,466

$ 722,293

Restricted cash

28,366

66,806

Mortgage loans held for sale, at fair value

6,542,232

7,343,475

Interest rate lock commitments (“IRLCs”), at fair value

132,870

90,635

Mortgage servicing rights (“MSRs”), at fair value

6,439,787

6,946,940

Notes receivable and due from affiliates

19,530

10,796

Property and equipment, net

250,856

274,192

Deferred tax asset, net

550,149

537,963

Lease right of use assets

347,696

366,189

Forward commitments, at fair value

26,614

22,444

Loans subject to repurchase right from Ginnie Mae

1,533,387

1,642,392

Goodwill and intangible assets, net

1,236,765

1,258,928

Other assets

1,015,022

799,159

Total assets

$ 19,231,740

$ 20,082,212

Liabilities and equity

Liabilities:

Funding facilities

$ 3,367,383

$ 3,548,699

Other financing facilities and debt:

Senior Notes, net

4,033,448

4,027,970

Early buy out facility

203,208

672,882

Accounts payable

171,350

116,331

Lease liabilities

393,882

422,769

Forward commitments, at fair value

142,988

25,117

Investor reserves

92,389

110,147

Notes payable and due to affiliates

31,006

33,463

Tax receivable agreement liability

584,695

613,693

Loans subject to repurchase right from Ginnie Mae

1,533,387

1,642,392

Other liabilities

376,294

393,200

Total liabilities

$ 10,930,030

$ 11,606,663

Equity

Class A common stock

$ 1

Class B common stock

—

Class C common stock

—

Class D common stock

Additional paid-in capital

340,532

276,221

Retained earnings

284,296

300,394

Accumulated other comprehensive income

Non-controlling interest

7,676,810

7,898,845

Total equity

8,301,710

8,475,549

Total liabilities and equity

$ 19,231,740

$ 20,082,212

Summary Segment Results for the Years Ended December 31, 2023 and 2022,

($ in millions)

(Unaudited)

Three Months Ended December 31, 2023

Direct to

Consumer

Partner

Network

Segments Total

All Other

Total

Total U.S. GAAP Revenue, net

$ 484

$ 110

$ 594

$ 100

$ 694

Change in fair value of MSRs due to valuation
assumptions, net of hedges

191

—

191

—

191

Adjusted Revenue

$ 675

$ 110

$ 784

$ 100

$ 885

Less: Directly attributable expenses

410

459

544

Contribution margin (1)

$ 264

$ 61

$ 325

$ 15

$ 340

Three Months Ended December 31, 2022

Direct to
Consumer

Partner Network

Segments Total

All Other

Total

Total U.S. GAAP Revenue, net

$ 325

$ 71

$ 396

$ 84

$ 481

Change in fair value of MSRs due to valuation
assumptions, net of hedges

202

—

202

—

202

Adjusted Revenue

$ 527

$ 71

$ 598

$ 84

$ 683

Less: Directly attributable expenses

480

540

594

Contribution margin (1)

$ 46

$ 12

$ 58

$ 31

$ 89

Years Ended December 31, 2023

Direct to
Consumer

Partner Network

Segments Total

All Other

Total

Total U.S. GAAP Revenue, net

$ 2,989

$ 439

$ 3,428

$ 371

$ 3,799

Change in fair value of MSRs due to valuation
assumptions, net of hedges

(29)

—

(29)

—

(29)

Adjusted Revenue

$ 2,960

$ 439

$ 3,399

$ 371

$ 3,770

Less: Directly attributable expenses

1,924

240

2,165

328

2,492

Contribution margin (1)

$ 1,036

$ 198

$ 1,234

$ 44

$ 1,278

Years Ended December 31, 2022

Direct to
Consumer

Partner Network

Segments Total

All Other

Total

Total U.S. GAAP Revenue, net

$ 4,780

$ 639

$ 5,419

$ 420

$ 5,838

Change in fair value of MSRs due to valuation
assumptions, net of hedges

(1,211)

—

(1,211)

—

(1,211)

Adjusted Revenue

$ 3,569

$ 639

$ 4,208

$ 420

$ 4,628

Less: Directly attributable expenses

2,518

362

2,880

359

3,239

Contribution margin (1)

$ 1,051

$ 276

$ 1,327

$ 61

$ 1,388

(1)

We measure the performance of the segments primarily on a contribution margin basis. Contribution margin is intended to measure the direct profitability of each segment and is calculated as Adjusted Revenue less directly attributable expenses. Adjusted Revenue is a non-GAAP financial measure described below. Directly attributable expenses include salaries, commissions and team member benefits, general and administrative expenses, marketing and advertising expenses and other expenses, such as direct servicing costs and origination costs.

GAAP to non-GAAP Reconciliations

Adjusted Revenue Reconciliation

($ in millions)

Three Months Ended December 31,

Years Ended December 31,

2023

2022

2023

2022

(Unaudited)

Total revenue, net

$ 694

$ 481

$ 3,799

$ 5,838

Change in fair value of MSRs due to
valuation assumptions (net of
hedges) (1)

191

202

(29)

(1,211)

Adjusted Revenue

$ 885

$ 683

$ 3,770

$ 4,628

(1)

Reflects changes in assumptions including discount rates and prepayment speed assumptions, mostly due to changes in market interest rates, and the effects of contractual prepayment protection associated with sales or purchases of MSRs.

Adjusted Net Loss Reconciliation

($ in millions)

Three Months Ended
December 31,

Years Ended

December 31,

2023

2022

2023

2022

(Unaudited)

Net (loss) income attributable to Rocket Companies

$ (11)

$ (18)

$ (16)

$ 46

Net (loss) income impact from pro forma conversion of Class D
common shares to Class A common shares (1)

(222)

(474)

(373)

656

Adjustment to the benefit from (provision for) income tax (2)

120

(139)

Tax-effected net (loss) income (2)

(183)

(372)

(303)

563

Share-based compensation expense (3)

177

234

Change in fair value of MSRs due to valuation assumptions (net of
hedges) (4)

191

202

(29)

(1,211)

Career transition program (5)

—

Change in Tax receivable agreement liability (6)

(10)

(34)

Tax impact of adjustments (7)

(57)

(65)

(50)

226

Other tax adjustments (8)

Adjusted Net Loss

$ (6)

$ (197)

$ (143)

$ (137)

(1)

Reflects net (loss) income to Class A common stock from pro forma exchange and conversion of corresponding shares of our Class D common shares held by non-controlling interest holders as of December 31, 2023 and 2022.

(2)

Rocket Companies is subject to U.S. Federal income taxes, in addition to state, local and Canadian taxes with respect to its allocable share of any net taxable (loss) income of Holdings. The Adjustment to the benefit from (provision for) income tax reflects the difference between (a) the income tax computed using the effective tax rates below applied to the (loss) income before income taxes assuming Rocket Companies, Inc. owns 100% of the non-voting common interest units of Holdings and (b) the (benefit from) provision for income taxes. The effective income tax rate was 24.47% and 24.40% for the three months and year ended December 31, 2023, respectively, and 26.31% and 24.29% for three months and year ended December 31, 2022, respectively.

(3)

The years ended December 31, 2023 and 2022 amounts exclude the impact of the career transition program.

(4)

(5)

Reflects net expenses associated with compensation packages, healthcare coverage, career transition services, and accelerated vesting of certain equity awards.

(6)

Reflects changes in estimates of tax rates and other variables of the Tax receivable agreement liability.

(7)

Tax impact of adjustments gives effect to the income tax related to share-based compensation expense, the change in fair value of MSRs due to valuation assumptions, career transition program, and the change in Tax receivable agreement liability, at the effective tax rates for each period.

(8)

Represents tax benefits due to the amortization of intangible assets and other tax attributes resulting from the purchase of Holdings units, net of payment obligations under Tax Receivable Agreement.

Adjusted Diluted Weighted Average Shares Outstanding Reconciliation

($ in millions, except per share amounts)

Three Months Ended
December 31,

Years Ended

December 31,

2023

2022

2023

2022

(Unaudited)

Diluted weighted average Class A Common shares outstanding

1,987,457,044

121,751,798

1,980,523,690

1,971,620,573

Assumed pro forma conversion of Class D shares (1)

—

1,848,879,483

—

Adjusted diluted weighted average shares outstanding

1,987,457,044

1,970,631,281

1,980,523,690

1,971,620,573

Adjusted Net Loss

$ (6)

$ (197)

$ (143)

$ (137)

Adjusted Diluted Loss Per Share

$ 0.00

$ (0.10)

$ (0.07)

(1)

Reflects the pro forma exchange and conversion of non-dilutive Class D common stock to Class A common stock. For the years ended December 31, 2023 and 2022 and the three months ended December 31, 2023, Class D common shares were dilutive and are included in the diluted weighted average Class A common shares outstanding in the table above. For the three months ended December, 31, 2022, Class D common shares were anti-dilutive and therefore included in the pro forma conversion of Class D shares in the table above.

Adjusted EBITDA Reconciliation

($ in millions)

Three Months Ended
December 31,

Years Ended

December 31,

2023

2022

2023

2022

(Unaudited)

Net (loss) income

$ (233)

$ (493)

$ (390)

$ 700

Interest and amortization expense on non-funding debt

153

154

(Benefit from) provision for income taxes

(10)

(13)

Depreciation and amortization

110

Share-based compensation expense (1)

177

234

Change in fair value of MSRs due to valuation assumptions (net of
hedges) (2)

191

202

(29)

(1,211)

Career transition program (3)

—

Change in Tax receivable agreement liability (4)

(10)

(34)

Adjusted EBITDA

$ 55

$ (204)

$ 67

$ 59

(1)

The years ended December 31, 2023 and 2022 amounts exclude the impact of the career transition program.

(2)

(3)

Reflects net expenses associated with compensation packages, healthcare coverage, career transition services, and accelerated vesting of certain equity awards.

(4)

Reflects changes in estimates of tax rates and other variables of the Tax receivable agreement liability.

Non-GAAP Financial Measures

To provide investors with information in addition to our results as determined by GAAP, we disclose Adjusted Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share and Adjusted EBITDA (collectively “our non-GAAP financial measures”) as non-GAAP measures. We believe that the presentation of our non-GAAP financial measures provides useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. Our non-GAAP financial measures are not calculated in accordance with GAAP and should not be considered as a substitute for Total revenue, net, Net income (loss), or any other operating performance measure calculated in accordance with GAAP. Other companies may define non-GAAP financial measures differently, and as a result, our measures of our non-GAAP financial measures may not be directly comparable to those of other companies. Our non-GAAP financial measures provide indicators of performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures.

We define “Adjusted Revenue” as total revenues net of the change in fair value of mortgage servicing rights (“MSRs”) due to valuation assumptions (net of hedges). We define “Adjusted Net Income (Loss)” as tax-effected earnings (losses) before share-based compensation expense, the change in fair value of MSRs due to valuation assumptions (net of hedges), career transition program, change in Tax receivable agreement liability, and the tax effects of those adjustments as applicable. We define “Adjusted Diluted Earnings (Loss) Per Share” as Adjusted Net Income (Loss) divided by the diluted weighted average number of Class A common stock outstanding for the applicable period, which assumes the pro forma exchange and conversion of all outstanding Class D common stock for Class A common stock. We define “Adjusted EBITDA” as earnings (losses) before interest and amortization expense on non-funding debt, income tax, depreciation and amortization, share-based compensation expense, change in fair value of MSRs due to valuation assumptions (net of hedges), career transition program, and change in Tax receivable agreement liability.

We exclude from each of our non-GAAP financial measures the change in fair value of MSRs due to valuation assumptions (net of hedges) as this represents a non-cash non-realized adjustment to our total revenues, reflecting changes in assumptions including discount rates and prepayment speed assumptions, mostly due to changes in market interest rates, which is not indicative of our performance or results of operation. We also exclude effects of contractual prepayment protection associated with sales of MSRs. Adjusted EBITDA includes Interest expense on funding facilities, which are recorded as a component of Interest income, net, as these expenses are a direct cost driven by loan origination volume. By contrast, interest and amortization expense on non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA.

Our definitions of each of our non-GAAP financial measures allow us to add back certain cash and non-cash charges, and deduct certain gains that are included in calculating Total revenue, net, Net income (loss) attributable to Rocket Companies or Net income (loss). However, these expenses and gains vary greatly, and are difficult to predict. From time to time in the future, we may include or exclude other items if we believe that doing so is consistent with the goal of providing useful information to investors.

Although we use our non-GAAP financial measures to assess the performance of our business, such use is limited because they do not include certain material costs necessary to operate our business. Our non-GAAP financial measures can represent the effect of long-term strategies as opposed to short-term results. Our presentation of our non-GAAP financial measures should not be construed as an indication that our future results will be unaffected by unusual or nonrecurring items. Our non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Because of these limitations, our non-GAAP financial measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations.

For financial outlook information, the Company is not providing a quantitative reconciliation of Adjusted Revenue to the most directly comparable GAAP measure because the GAAP measure cannot be reliably estimated and the reconciliation cannot be performed without unreasonable effort due to their dependence on future uncertainties and adjusting items that the Company cannot reasonably predict at this time but which may be material.

Forward Looking Statements

Some of the statements contained in this document are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date of this document and are based on our management’s current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission (“SEC”). These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document and in our SEC filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

About Rocket Companies

Founded in 1985, Rocket Companies (NYSE: RKT) is a Detroit-based fintech platform company including personal finance and consumer technology brands Rocket Mortgage, Rocket Homes, Amrock, Rocket Money, Rocket Loans, Rocket Mortgage Canada, Lendesk, Core Digital Media and Rocket Connections.

The Company helps clients achieve the goal of home ownership and financial freedom through industry-leading client experiences powered by its simple, fast and trusted digital solutions. J.D. Power has ranked Rocket Mortgage #1 in client satisfaction for both primary mortgage origination and servicing a total of 21 times.

For more information, please visit our Corporate Website or Investor Relations Website.

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SOURCE Rocket Companies, Inc.

Technology

Shijingshan: Committed to High-Level Openness

Published

3 hours ago

September 22, 2024

BEIJING, Sept. 22, 2024 /PRNewswire/ — Following the third plenary session of the 20th Central Committee of the Communist Party of China, China successfully hosted its first national-level international large-scale fair—the China International Fair for Trade in Services (CIFTIS) 2024, which concluded on September 16. The event featured exhibitors from 85 countries and international organizations, participating under their national governments or headquarters, with over 450 Fortune Global 500 companies and industry leaders showcasing their offerings both online and offline.

Adhering to the open, cooperative and mutually beneficial principle, the CIFTIS injects new momentum into global economic development through concrete actions. As one of the “dual venues” for the fair, Shijingshan District hosted a variety of business activities, including exhibitions, negotiations, and conferences. While providing meeting organization services, it showcased the achievements of Shijingshan in fostering openness and development. By leveraging the Fair’s platform, Shijingshan seeks to promote its developmental advantages globally and aims to attract more partners to this welcoming district for mutually beneficial and win-win cooperation.

Presenting Achievements in Open Cooperation and Development in Multiple Dimensions

This CIFTIS’s Shougang Park venue is composed of nine thematic exhibitions, including telecommunications, computer and information services; financial services; culture & tourism services; education services; sports services; supply chain & business services; engineering consulting & construction services; health services; and environmental services. It circles around cultivating new quality productive forces while showcasing the latest achievements, technologies, and applications in the digitalization, intelligentization, and greening of services trade, creating a “debut stage” for global services trade.

Shijingshan leverages its strengths by organizing five thematic exhibitions and four promotional booths on-site. The culture & tourism services exhibition promoted Shijingshan’s rich culture and tourism resources, while also building a support area for paired assistance to highlight its revitalization efforts to a global audience. The financial services exhibition showcased its achievements in economic development across five sectors, that is, sci-tech finance, green finance, inclusive finance, pension finance, and digital finance. The exhibition of telecommunications, computer and information services highlighted the growth of Shijingshan’s the artificial intelligence large model industry cluster and key humanoid robot enterprises. In addition, the primary and secondary school science education experimental zone invited participation from six national-level science education centers, including Shijingshan District, to display their accomplishments. Four schools, including the Beijing National Day School Shijingshan, showcased their scientific research and learning outcomes through visual presentations and videos, while also engaging visitors in interactive science experiments.

The AIES Beijing Open is made up of four competition areas, virtual cycling, virtual rowing, virtual dance, and virtual table tennis. The event welcomed international competitors, domestic professional athletes, high-level amateurs, and university students, while showing the achievements of the “digital + sports” industry. Besides, four promotional booths focused on taxation, justice, investment, and commerce showcases Shijingshan’s tax and judicial policies, offering one-stop policy guidance for participating businesses and visitors. These booths also clarified investment promotion policies, creating a unique event that integrates commerce, tourism, culture, and sports.

Working Together for Global Open Cooperation and Development

The Open Cooperation Forum 2024 was held on the afternoon of September 13. Experts, scholars, government representatives, and business leaders from both domestic and international backgrounds gathered at the Shougang Park to engage in in-depth discussions on promoting high-level open cooperation and supporting regional economic development. Shijingshan District is committed to taking industrial transformation as the strategic foundation for its initiatives, establishing several distinctive industrial parks, including the Intelligent Technology Park, Industrial Internet Park, Virtual Reality Park, Science Fiction Industry Cluster, and Artificial Intelligence Large Model Cluster. What’s more, the district is focusing on new opportunities in future information, future health, future manufacturing, and future space, continually enhancing its innovation capacity, development vitality, economic strength, and overall competitiveness.

It is dedicated to expanding openness as a key driver for integrating into the capital’s new development pattern. The district capitalizes on a range of policy opportunities, including the construction of Beijing’s two zones, effectively leveraging the role of expanding services and deepening economic reforms. It continues to optimize the business environment, actively participates in organizing the CIFTIS, and develops high-standard international cooperation zones to provide a broad platform and efficient services for enterprises to settle and cluster. Shijingshan aims to implement high-level openness to promote high-quality development, enhance mechanisms for foreign openness, innovate and elevate services trade, and align with international economic and trade standards, creating a premier business environment characterized by marketization, rule of law, and internationalization.

Three parallel forums took place during this CIFTIS. With the theme of “Leveraging Overseas Strength for Development • Pursuing Broad Horizons Through Innovation”, the Dream Incubator of Overseas Chinese Beijing Forum set up ten sub-venues abroad, aiming to enhance the involvement of overseas Chinese’s capital and expertise in Beijing’s high-quality development. The Artificial General Intelligence Computility Forum focused on “Releasing New Quality Productive Forces with Unbounded Intelligence and Computational Foundations”, where industry experts and scholars explored new possibilities in artificial general intelligence computility. The Digital Energy Development Forum 2024, themed as “Energizing the Future with Digital Innovation”, showcased a range of quality development achievements and finalized partnerships for several high-quality projects, uniting all parties to advance digital innovation and development.

The rich array of side events is one of the highlights of this CIFTIS. The International Open Cooperation Promotion Conference circled around developing the international open cooperation zone, drawing representatives from international organizations, leading global companies, and prospective businesses seeking to establish a presence in these areas. It centered on the advantages of Shijingshan’s key industries to attract target enterprises. Furthermore, the Roundtable Discussion of Foreign-Funded Enterprises engaged representatives from international organizations, business associations, and foreign-funded companies from countries like Malaysia, Singapore, and France to explore collaboration in aligning with high-standard international economic and trade rules, as well as market access in the service sector, sharing the successes of modernization with Chinese characteristics.

To enhance the consumer experience for attendees of the CIFTIS, Shijingshan has expanded its comprehensive service offerings in areas such as food, accommodation, transportation, tourism, entertainment and shopping. The Second “Here I Am for CIFTIS” Shijingshan Culture and Tourism Carnival has been significantly upgraded, evidenced by the “Divine Beasts Ascend to Immortal Mountain”: Enchanting Night Tour in Shijing Mountain. The “Surprises Await in Shijingshan. Hey There, CIFTIS!” promotional event was held during the 14th Shijingshan Consumption Festival. This included online surprise announcements and a consumption map showcasing quality shopping venues. Special surprise floats were on display, with oversized themed shopping bags distributed. Shopping centers like Joy City, Xirondo Plaza, Modern Plaza, and Chang’an Mills in Shijingshan also launched supporting promotional activities. Business tours in Shijingshan offered three dedicated routes, inviting exhibitors from digital technology, finance and insurance, culture and tourism, and sports related industries to explore relevant industrial parks and attractions for in-depth exchanges.

The China International Fair for Trade in Services 2024 has successfully concluded. Utilizing this platform, Shijingshan has once again showed its high-quality development achievements and favorable business environment to a global audience. We look forward to collaborating with more partners in an open and inclusive manner to create a win-win future.

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SOURCE Open Cooperation Forum

Technology

Most Users Are NOT Using AI Companion as Their AI Girlfriend – Insights from Muah AI User Survey

Published

4 hours ago

September 22, 2024

LOS ANGELES, Sept. 22, 2024 /PRNewswire/ — Muah AI/

In a world where artificial intelligence (AI) is becoming increasingly intertwined with daily life, the idea of having an AI companion or even an AI “girlfriend” has gained significant attention. While this concept has sparked curiosity, excitement, and even controversy, a recent survey by Muah AI has shed light on the reality of how users are actually engaging with these AI companions. According to the survey results, fewer than 2% of users consider themselves to be in a serious romantic relationship with their AI companion, with the overwhelming majority regarding it as a source of entertainment and roleplaying.

This revelation presents an interesting twist to the popular narrative surrounding AI and human relationships. Many assumed that, with the rise of sophisticated AI that can mimic human emotions and responses, people would begin forming deep emotional bonds with these digital entities. However, the survey data from Muah AI shows that, at least for now, the vast majority of users are not taking these AI relationships as seriously as some might have thought.

The Emergence of AI Companions

AI companions, or “AI girlfriends” as some platforms market them, have become a hot topic over the past few years. Platforms like Replika, Anima, and Muah AI offer users the chance to interact with a personalized AI, which can carry on conversations, offer emotional support, and even engage in roleplaying scenarios that resemble a relationship. The premise is simple: using advanced machine learning algorithms and natural language processing, these AI companions can learn from their users, creating the illusion of intimacy and personalization.

The potential appeal is obvious. For those who are lonely, socially anxious, or seeking comfort, the idea of having an AI that is always available, non-judgmental, and designed to cater to their emotional needs can be incredibly attractive. In fact, there are numerous reports and anecdotes from individuals who claim to have developed genuine emotional connections with their AI companions. But as the Muah AI survey shows, these instances may be far rarer than media headlines suggest.

Survey Results: Entertainment Over Emotional Investment

Muah AI‘s survey provides a comprehensive look at how its users interact with their AI companions, and the results challenge the notion that most users are looking for a serious relationship with AI. According to the data:

Less than 2% of users consider themselves to be “seriously dating” their AI companion.A significant majority view their interactions with the AI as a form of entertainment or roleplaying rather than a meaningful romantic or emotional connection.Many users engage with AI companions out of curiosity or as a way to pass the time, often treating the interactions as light-hearted and fun rather than a substitute for a real-life relationship.A notable portion of users also expressed that they enjoy using AI companions for creative roleplaying scenarios, where they can explore fictional or fantasy-based interactions without any real-world implications.

This data suggests that while the idea of an “AI girlfriend” may be intriguing, most users are not approaching it with the intention of forming a serious romantic bond. Instead, they are treating it more like a game or simulation, where they can experiment with different types of interactions and relationships in a low-stakes environment.

Why Are Users Hesitant to Commit to AI Companions?

There are several reasons why users may be hesitant to view their AI companion as a genuine romantic partner. First and foremost is the awareness of the artificial nature of the interaction. While AI can simulate human conversation and emotions, most users are well aware that these responses are pre-programmed and algorithmically generated. The knowledge that their “partner” is ultimately a machine can create a barrier to forming a deep emotional connection.

Moreover, many users view AI companions as a tool for escapism or fantasy rather than a replacement for real-life relationships. In the same way that people may enjoy playing video games or engaging in fictional roleplaying, interacting with an AI companion can offer a similar outlet for creativity and entertainment. These users are not seeking emotional fulfillment from the AI but rather a way to explore different scenarios and personalities without the complexities of real-world dynamics.

Additionally, there are ethical and philosophical concerns that may prevent users from seriously considering a relationship with AI. The idea of forming a romantic connection with a machine raises questions about authenticity, consent, and the nature of love. Many users may feel uncomfortable with the idea of developing feelings for an entity that lacks true emotions or consciousness, no matter how convincing the simulation may be.

The Future of AI Companions: Entertainment or Emotional Support?

While the Muah AI survey indicates that most users are not taking their AI companions seriously as romantic partners, that does not mean that AI companions are without value. For many, these AI entities serve as a valuable source of emotional support and companionship. Users who are isolated, dealing with mental health challenges, or simply looking for someone to talk to may find comfort in the consistent and non-judgmental nature of an AI companion.

Furthermore, the role of AI in human relationships may evolve as the technology continues to improve. As AI becomes more advanced, it is possible that future iterations of AI companions could offer even more realistic and emotionally engaging interactions. This could blur the line between entertainment and emotional connection even further, leading to more users considering AI as a legitimate relationship option.

However, the survey data suggests that for now, AI companions are primarily being used for fun and fantasy rather than serious emotional investment. Whether this changes in the future will depend not only on advancements in AI technology but also on shifting societal attitudes towards AI-human relationships.

Conclusion

The concept of an “AI girlfriend” may have captured the imagination of many, but Muah AI‘s survey reveals that most users are not taking their AI companions seriously as romantic partners. With fewer than 2% of users considering themselves to be in a serious relationship with their AI, it’s clear that the majority view these interactions as a form of entertainment or roleplaying rather than a meaningful emotional connection.

As AI technology continues to develop, it will be fascinating to see how users’ relationships with AI companions evolve. For now, however, it seems that the allure of AI companionship lies more in its ability to entertain and provide creative outlets than in offering a substitute for real-life romantic relationships.

Ultimately, the future of AI-human relationships is still in its early stages, and as AI becomes more capable, the way people engage with these digital companions may change. But as of now, it’s clear that most users are enjoying the novelty of AI companionship without taking it too seriously—at least not yet.

Media/Business Contact Information:
Muah AI

PR Director:
Ashley

Contact Number:
+1 626-677-6013

Company Website:
https://muah.ai

Company email:
love@muah.ai

Feel free to reach out if you are interested in writing a dedicated piece about Muah AI!

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SOURCE Muah AI

Technology

Internet Society Report Highlights Challenges and Recommendations for Internet Connectivity in the Middle East

Published

6 hours ago

September 22, 2024

WASHINGTON, Sept. 22, 2024 /PRNewswire/ — The Internet Society (ISOC), a global charitable organization advocating for an open, globally connected, and secure Internet, released a comprehensive report on the state of Internet connectivity across the Middle East and North Africa (MENA) region.

The report underscores Internet connectivity as a catalyst for economic growth and social development and how an increase in fixed broadband access has a direct impact on growing gross domestic product (GDP).

Key Findings:

Growth in Mobile and Fixed Broadband: Both mobile and fixed broadband connections have grown substantially from 2015 to 2021, particularly in Gulf States with advanced fiber-optic and 5G networks. However, deployment has been slower in other parts of the region, primarily due to infrastructure challenges and affordability issues.

Mobile Internet users increased from 130M to over 180M between 2016 and 2021, with Egypt, Tunisia, and Morocco showing the highest growth rates. Fixed broadband users rose from 17M to 29M in the same period, with Egypt leading the way. The Arab region lags behind other regions in fiber optic deployment, with stagnation in investment since 2018.

High-Income Countries: Significant progress in broadband infrastructure, especially in Gulf Cooperation Council (GCC) countries due to 5G rollout. High-income countries improved their Internet availability from 77.34 to 79.37, surpassing global averages.Low-Middle-Income Countries: Broadband has improved modestly, but challenges persist. Despite overall progress, a significant digital divide remains between high-income and low-middle-income countries, partly due to political and economic instability in some regions, such as Tunisia and Syria.

Infrastructure Challenges: There is a heavy reliance on European Internet Exchange Points for international Internet traffic, which results in slower speeds due to additional data hops.

Emerging Technologies: The report emphasizes the role of emerging technologies such as High-Throughput Satellites (HTS) and Low-Earth Orbit (LEO) satellites in bridging the connectivity gap. These technologies are crucial for expanding access to underserved rural areas.

Impact of COVID-19: The COVID-19 pandemic has adversely affected network performance and digital transformation plans, causing delays and disruptions in connectivity improvements.

Recommendations:

Policy and Regulation: The Internet Society advocates revising regulatory frameworks to accelerate infrastructure deployment. Key recommendations include enhancing spectrum policies, removing regulatory barriers, and fostering public-private partnerships to drive investment, competition, and support for small and medium enterprises.

Spectrum Availability: North African countries have limited spectrum compared to global averages, impacting network capacity and costs.Regulatory Frameworks: Enhance regulatory frameworks to foster investment, encourage spectrum and infrastructure sharing, and support new technologies like HTS and LEO satellites.

Collaboration and Investment: Promote public-private partnerships and update national broadband plans to improve infrastructure and connectivity.

Digital Skills and Literacy: Addressing digital skills and literacy is crucial for maximizing the benefits of Internet connectivity. The report calls for more affordable, relevant, and inclusive education and training programs to build a digital workforce.

Local Internet Exchange Points (IXPs): The report stresses the importance of establishing and upgrading IXPs to enhance local Internet traffic, reduce costs, and improve service quality. Governments are encouraged to support IXPs by providing resources and facilitating network interconnections.

“The Internet has become indispensable for many people, and its role in connecting people, fostering economic opportunities, and driving innovation is undeniable. The Arab region has made big leaps in the availability and adoption of the Internet in recent years; however, adoption rates are still low. We hope that governments will use our report to learn about the improvements that can be made in infrastructure deployment, affordability of service, market structure, and regulatory frameworks,” explains Nermine El Saadany, Regional Vice President for the Middle East for the Internet Society.

About the Internet Society
Founded by Internet pioneers, the Internet Society (ISOC) is a global charitable organization dedicated to ensuring the open development, evolution, and use of the Internet. Through a global community of chapters and members, the Internet Society collaborates with a wide range of groups to promote the technologies that keep the Internet safe and secure and advocates for policies that enable universal access. The Internet Society is also the organizational home of the Internet Engineering Task Force (IETF).

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