Rocket Companies (RKT 12.05%), a major U.S. financial technology and mortgage platform, released its second quarter 2025 earnings on July 31, 2025. The most notable headline: it delivered higher-than-expected adjusted revenue and non-GAAP earnings per share (EPS) for Q2 2025, while also completing its major acquisition of Redfin. The company reported adjusted revenue of $1.34 billion, outpacing the analyst consensus of $1.27 billion. Adjusted diluted earnings per share reached $0.04, compared with the $0.03 estimate. However, Profitability metrics such as GAAP net income and adjusted EBITDA declined in Q2 2025 compared to Q2 2024. The company succeeded in building top-line growth in Q2 2025, but faces ongoing competitive and cost pressures. Overall, the quarter showed progress on strategic initiatives, but also highlighted mixed profitability trends.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Adjusted, Non-GAAP) | $0.04 | $0.03 | $0.06 | (33.3%) |
| Revenue (Adjusted, Non-GAAP) | $1.34 billion | N/A | N/A | N/A |
| Revenue (GAAP) | $1.36 billion | $1.30 billion | 4.6% | |
| Net Income (GAAP) | $34 million | $178 million | (80.9%) | |
| Adjusted EBITDA | $172 million | $225 million | (23.6%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Overview of Rocket Companies’ Business and Focus
Rocket Companies operates as a technology-driven financial services platform, with its core business centered on mortgage origination and servicing. The company is best known for Rocket Mortgage, its digital mortgage lending business, and has established itself as a leader in the fintech space through heavy investment in technology and a scalable operating model. Its broader offerings span from home loans to digital tools supporting home search, refinancing, and servicing.
Recent years have seen Rocket expand its platform aggressively. The company’s main focus areas are technology innovation, brand strength, regulatory compliance, client retention, and competing effectively in the mortgage and broader homeownership market. Proprietary technology and artificial intelligence (AI) tools are central to its strategy, driving productivity gains and efficiency. At the same time, Rocket keeps a close eye on compliance as it operates in a highly regulated sector. The brand’s recognition and continued client satisfaction are critical in an industry where trust and ease of use drive loyalty.
Quarterly Performance: Financials, Integration, and Product Developments
The second quarter of 2025 capped a period of significant operational and strategic change for Rocket. The standout result was top-line growth, with adjusted non-GAAP revenue reaching $1.34 billion in Q2 2025, surpassing expectations by $68 million. This performance benefited from higher loan origination volumes, alongside increased servicing revenue. Key growth drivers included continued investment in AI-powered tools. For example, in Q2 2025, daily refinance client follow-ups increased 20%, and new agentic AI features now handle 80% of earnest money deposit verifications automatically, eliminating about 20,000 hours of manual work annually.
However, profitability came under pressure in Q2 2025 compared to the prior year. Adjusted diluted earnings per share declined to $0.04 from $0.06 in Q2 2024, and Adjusted EBITDA was $172 million, down from $225 million for Q2 2024. GAAP net income dropped sharply year over year in Q2 2025, as Total expenses (GAAP) climbed 20.5% year-over-year. This was driven by higher marketing spend and costs related to the Redfin acquisition. Operating leverage from technology and improved process efficiency partly offset these higher costs, but could not fully overcome the margin compression.
The quarter marked the close of Rocket’s all-stock acquisition of Redfin, a large online real estate marketplace. With Redfin bringing about 50 million monthly active users and a network of over one million listings, Rocket’s homeownership platform is now more vertically integrated. This acquisition expands its reach and enables new offerings, such as Rocket Preferred Pricing, which offers a reduced mortgage rate or closing credits to Redfin users—an example of how cross-brand synergies can provide extra value to homebuyers. Management noted early signs of growth in the purchase funnel and conversion rates tied to these initiatives during Q2 2025.
Mortgage origination, Rocket’s foundational business, continued to see year-over-year growth in volume, with closed loan origination volume increasing from $24,662 million in Q2 2024 to $29,056 million in Q2 2025. Closed loan origination volume reached $29.1 billion, up 18%. The Direct to Consumer channel posted $14.1 billion in sold loan volume, up 8.3% year-over-year, with margins rising to 4.40%. However, the Partner Network—a channel serving outside mortgage brokers and partners—grew sold loan volume to $13.4 billion but saw significant gain-on-sale margin contraction in the Partner Network segment, dropping from 1.59% in Q2 2024 to 0.90% in Q2 2025, and its contribution margin for the Partner Network segment fell 34% to $83 million. This reflects increased competition and pricing pressure in the wholesale mortgage space.
Strategic Shifts, Regulatory Developments, and One-Time Events
Rocket simplified its capital and share structure during the quarter, reducing the number of share classes from four to two. This “Up-C collapse” streamlines financial reporting and should make it easier for the company to use its shares for acquisitions. The move comes as Rocket seeks greater flexibility, including for future mergers and deals. The company also announced it will shut down Rocket Mortgage Canada and discontinue its co-branded Visa credit card, part of a focus on core U.S. mortgage and real estate businesses.
On the regulatory side, Rocket is involved in complex transactions. The Redfin acquisition closed at the start of July, increasing the company’s Class A share float to 12% as of July 1, 2025. Rocket also issued $4 billion in new debt, spreading maturities between 2030 and 2033, with proceeds partly allocated for another pending acquisition—Mr. Cooper, a mortgage servicer.
The quarter’s GAAP expense base, up to $1.336 billion, was notably higher, with elevated investment in marketing, technology, and one-time deal costs. Liquidity remains strong, with a $9.1 billion position as of June 30, 2025, of which $5.1 billion is in cash and equivalents as of June 30, 2025. The company’s servicing portfolio also remains substantial, responsible for a $609 billion unpaid principal balance and about 2.8 million loans as of June 30, 2025, generating approximately $1.6 billion in annual servicing fee income as of June 30, 2025.
Looking Ahead: Guidance, Integration, and Key Metrics
Management provided guidance for Q3 2025, projecting adjusted revenue (non-GAAP) of $1.60 billion to $1.75 billion. reflecting a full quarter of consolidated Redfin results.
Leadership pointed to sequential improvement, emphasizing continued focus on technology, client retention, and operating efficiency. However, no detailed earnings or margin guidance was offered for the remainder of fiscal 2025. Investors are expected to watch for successful Redfin integration, overall origination growth, and cost control as key themes in coming quarters. Macro risks such as a soft housing market and heightened competition remain present, and the company’s elevated expense base will demand continued revenue gains to maintain momentum.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
