Rocket profit drops 94% from boom year amid high interest rates
But because of those challenges, CEO Jay Farner says the company’s senior management is working around the clock to diversify the business beyond just mortgages.
“We are at a higher intensity than I have ever seen in my 27 years with the organization,” Farner told analysts on an earnings call Thursday afternoon. after the publication of the company’s report. “The work we’re doing – that no one else is doing – that will really differentiate the business to be much bigger than just a mortgage lender.”
To that end, Farner points to a litany of recently announced initiatives that he says will help weather the storm, some specific to the mortgage industry and some not.
Among these initiatives:
- News earlier this week that the fledgling solar lending initiative of Rocket Companies has partnered with personal lending arm Rocket Loans to provide consumers with financing for the installation of solar power infrastructure.
- An expansion into the Canadian mortgage market, headquartered just across the Detroit River in Windsor, announced earlier this month.
- The $1.3 billion acquisition late last year of personal finance app TrueBill, which has been renamed Rocket Money. Paid premium members surpassed 2 million users in July, more than doubling year-on-year, the company said, and the brand launched its first credit card in beta last quarter.
- Rocket Companies reports two new industry partnerships, including Austin, Texas-based fintech company Q2, which allows Rocket to work with regional banks and credit unions to offer mortgages without having to manage their own operations mortgages. Additionally, the company claims to work with financial giant Santander, which offers Rocket Mortgage services to around 2 million customers.
Farner said the company has dedicated more than 2,000 employees — out of about 26,000 — to such ventures.
“From time to time we have to put a lot of effort outside of the core mortgage (business) to grow the overall platform and grow the mortgage,” Farner said.
“That’s what you’re watching us do right now. We’re taking those resources, those salaries, and accelerating that engagement component of our platform,” the CEO continued. “So as we approach 2023 – and what we expect to be a still fairly tough mortgage market – we will lower the cost of acquisition (of the business), allowing us to spend more on marketing and earn more revenue. market shares.”
And despite the significant challenges facing the company, Rocket Companies’ earnings report shows a company with a strong balance sheet, with approximately $7.3 billion in total liquidity, including more than $900 million in cash.
Farner said additional mergers and acquisitions remain possible, particularly “services that can be added to generate revenue.”