Rocket ‘in a category of one’ with Redfin, Mr. Cooper deals done 

Four months after Rocket Companies completed its $1.75 billion acquisition of Redfin, CEO Varun Krishna declared that the company has reached a "defining moment." 

During an Oct. 30 earnings call, Krishna expressed pride in his team as he touted their recent successes, including another big M&A: the acquisition of mortgage rival Mr. Cooper, finalized Oct. 1. "We gained market share, we beat our adjusted revenue guidance and we brought three public companies together," he said. "This performance reflects our ability to balance short- and long-term execution."

Krishna also believes the market is ripe for a rebound.

"People want to buy homes; that pent-up demand is very real," he said. "Buyers are watching the market closely. They're waiting for clear signals and increased affordability before making their move."

Revenue gains: Rocket reported $1.61 billion in overall revenue in Q3, up from $1.36 billion in Q2 and in line with the $1.6 billion to $1.75 billion range that was projected.

Redfin's revenue, which Rocket CFO and Treasurer Brian Brown said "performed in line with expectations," was included in Rocket's earnings for the first time this quarter. Mr. Cooper's financials won't be included until Q4.

Operating expenses were also up, however, which Brown attributed in part to the inclusion of Redfin's expense base.

Redfin's impact: The Redfin integration is "fueling engagement," Krishna said. "In September, over 500,000 Redfin users started applications for home financing — that's more than double the number we saw in July."

Also in September, "13% of Rocket Mortgage retail purchase closing came from clients who use both Redfin and Rocket," he noted. "We expect this to only increase."

Q3 "marked our strongest performance in over three years" on the purchase side, Brown added, "as Redfin is already contributing meaningfully to our retail channel."

A bigger goal for homeownership: The "true value" of the Redfin and Mr. Cooper acquisitions "lies in combining distinct strength to create something greater than the sum of its parts," said Krishna, who declared that Rocket is now "in a category of one."

"Historically, our industry has operated in silos," he explained. "Rocket breaks that mold. We are not just one part of the process. We are all of them. We are a homeownership company bringing end-to-end integration to housing at a scale the industry has never seen."

What's next: With Redfin and Mr. Cooper financials in the mix for Q4, Rocket anticipates an adjusted revenue range of $2.1 billion to $2.3 billion. "On a Rocket standalone basis, excluding Mr. Cooper and Redfin, we expect adjusted revenue at the midpoint of the range to be up roughly 7% year-over-year," Brown said.

"We are well-positioned to finish the year strong and carry this momentum into the new year," he added. "Rocket's future is bright, and we are in control of our destiny."