Redfin already funneling customers to Rocket, CEO says 

Rocket's acquisition of Redfin was finalized less than a month ago, but it already appears to be paying dividends. 

The mortgage giant discussed the transition and shared some early results during a July 31 earnings call — its first since formally closing on the deal on July 1.

Rocket Companies CEO Varun Krishna told investors that if he could choose one word to describe the second quarter, it would be "execution." As an example, he pointed to the company's speedy refresh of Redfin's logo — which now includes a "Powered by Rocket" tagline — and integration of a Rocket mortgage prequalification button on Redfin home listings.

Providing Rocket with 'a new foothold': Leveraging Redfin to bring more customers into the top of the mortgage funnel will become hugely valuable, Krishna said, both by driving more business to Rocket and eventually reducing costs to consumers.

"Redfin gives Rocket a new foothold in purchase and takes our presence in local markets to another level," Krishna said during the call. "Relationships with 50 million consumers every month reflect a deep connection with demand right at the top of the funnel, and creates new purchase opportunities from both directions: from Redfin to Rocket and Rocket to Redfin."

In the first three weeks of July, nearly 200,000 people clicked the "Get Prequalified" button on Redfin, Krishna said. Of those users who had a Redfin account, 23% became a contactable lead at Rocket while 12% of all users who entered the funnel went on to start an application, "taking a significant step toward homeownership," Krishna added.

Incentives for bundling services: Since July 1, the company has seen more than 65 clients close on their home utilizing a Redfin agent and a Rocket mortgage, Krishna said. Buyers who use both services qualify for Rocket Preferred Pricing — a program that offers a one-point interest rate reduction for a year or up to $6,000 in closing credits. 

"This delivers meaningful dollars to buyers and helps make homeownership more attainable," Krishna said.

Redfin expected to boost revenue — and expenses: Since the Redfin acquisition didn't close until after the end of Q2, the brokerage's financials weren't included in Rocket's quarterly results, but they were factored into Rocket's guidance for the coming quarter. 

Rocket reported $1.36 billion in revenue in the second quarter, which was up slightly from a year prior. But expenses rose by $227 million, pushing down profits from $178 million a year ago to $34 million last quarter. Rocket execs noted that there were major expenses related to the company's planned acquisition of Mr. Cooper. 

Looking ahead to the third quarter — which will include Redfin's performance — Rocket execs expect to see revenue rise to between $1.6 billion and $1.75 billion. But expenses are projected to increase by approximately $335 million compared to the second quarter, with $275 million of that total attributable to Redfin.