Dan Gilbert’s Rocket Companies on Thursday reported its first full-year loss since going public in 2020.
Rocket had a net loss of $390 million on $3.8 billion in revenue for all of 2023, compared with a profit of $700 million in 2022.
Most of that red ink appeared in the fourth quarter, when Rocket saw a $233 million net loss on $694 million in revenue.
Like other mortgage lenders, Rocket has seen a drop in business since early 2022 when mortgage rates began rising from what had been historic lows, leading to fewer home purchases and less refinancing activity.
Rocket Companies is the corporate parent of multiple Dan Gilbert businesses, the biggest being Rocket Mortgage, formerly known as Quicken Loans.
The mortgage industry is highly seasonal and Rocket Chief Financial Officer Brian Brown called the fourth quarter, which ran Oct. 1 through Dec. 31, “one of the worst quarters for mortgage origination in recent history.”
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Rocket had its initial public offering in August 2020 and saw a record profit of $9.4 billion for that year amid a nationwide boom in mortgage refinancings. Rocket went on to book a $6.1 billion profit in 2021 and a $700 million profit in 2022.
The firm tumbled out of the Fortune 500 last year and has responded to the mortgage industry downturn by cutting expenses, including several rounds of buyouts.
During a late afternoon earnings call, Rocket executives said they slashed expenses by 20% in 2023 compared with 2022, and in just the fourth quarter, cut expenses by $100 million over the third quarter.
Rocket CEO Varun Krishna said the firm grew its market share for both mortgage purchases and mortgage refinancings in 2023 compared with the previous year.
And he said Rocket is leading the mortgage industry in adopting artificial intelligence technology, with an aim of processing more mortgages in the future without having to hire as many people as they would without such technology.
Rocket’s latest employee headcount numbers are expected to be released within days.
The mortgage industry overall is projected to grow 30% this year, Rocket executives said, with mortgage rates expected to decline in the later half of the year.
“We are entering 2024 with momentum and we are poised for growth,” Brown, the chief financial officer, said.
Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on X @jcreindl.
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