Rocket Companies (RKT) 12 Nov 242024 Q3 Earnings call transcript

Thank you for standing by, and welcome to the Rocket Companies Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I'd now like to turn the call over to Sharon Ng, Head of Investor Relations.

You may begin.

Good afternoon, everyone, and thank you for joining us for Rocket Companies' earnings call covering the third quarter of 2024. With us this afternoon are Rocket Companies CEO, Varun Krishna; and our CFO, Brian Brown.

our website earnings Info. at issued available which we our on rocketcompanies.com today, third release, quarter is Earlier under Investor available is website on presentation. Also an investor our

go over let Before to turn disclaimers. things me I quickly over our Varun,

the could information we We events, contained differ as are risks today's statements quarter obligation today. and our and as subject expectations financial except discussion for This to encourage performance mention On forward-looking no materially includes the that you law. our third conference these further these risk as in a a risks required regarding call you by to result cause well statements. assumptions factors we to provide and outlook. call, of from filings actual with undertake update results consider uncertainties. as of These the We our new SEC uncertainties to or detailed statements information

being website. on broadcast today. accessible online is of This be later will recording call call The is posted and Relations Investor our the

as the today include release non-GAAP can our non-GAAP and Reconciliations GAAP reported between our as for with metrics found also commentary today well earlier in filings our be will issued SEC. financial earnings measures. Our in results

over And Varun? to to with turn that, get I'll things Krishna Varun us started.

to Good Rocket Sharon. Earnings and Companies' welcome afternoon, Call. the Thanks, everyone, Third Quarter XXXX

Day, kick theme: our vision as the unveiled key full. Today, to is to ever for we extending want call off our the Two ability Investor months by first glass Optimism at ago, future. I emphasizing half optimism. our see one Rocket's and

follow the time an Fed increased. Instead, and X twist, both fixed curveball XX-year almost yield the thrown has for years. But not XX-year mortgage the market the the rate suit. imaginable. first the industry in months, few mortgage rates past With while rates, did easing, actually inflation cut the rates treasury every Fed lowered interesting in Over our

perspective. in put purchase mortgage up has year market challenging, the rate to of X.X moving Despite we long X.X a lower declined being We're view X- direction. signs X% experience, improve to showing are in Plus, fixed things it's take XX% increased nearly important always right to XX-year still my market opportunities that's is months helping opening seeing affordability a the is healthy from In monthly to housing inventory the and months, from below housing considered improvement. has range The and This refinancing but a ago. rejuvenation. balanced X-month inventory the payments.

market showing compared to While mission affordability home. navigating there and the is service in and challenges, improvement everyone to help signs last together of we're inventory right their our year, are of still certainly consumers, needs and with

world the mindset is XX-year of bets will on because a the clients always importance who continues That to Our Every of we and reflects that uncertainty. homeownership with betting dream. American is in on riddled themselves. cornerstone the be day, be optimism are make

is Our opening proud that role to Rocket. us the be to dream what in makes door

market XXXX Investor from minute bold X% X% results the share to from goals: our reflect share announced of a XX% the take XX%. me double share we Let market market quarter. to increase At Day, purchase refinance to our on and our to

to share year-over-year share was market the so quarter step goals. a refinance both and quarter. am these our solid This I we toward pleased purchase that in expanded third

our in alongside volume. in to XX% significant accelerating growth year-over-year compared high end of adjusted QX. and volume surpassing activity billion guidance $X.XXX delivered driven refinance purchase Net surged rate lock growth revenue, by We the

Our came adjusted XX%, higher Xx at XXXX. EBITDA than in margins of QX

$X.XX. We also adjusted diluted per of earnings reported share

basic direct thing: execution. a one are numbers These result of

foundation durable, toward short-term and of the execution sales every value product every results competitive technology investment also call on advantage, of seeing and to we're fight the progress. the and aspect refine and and That decades members team to the inch operational for is long-term today which marketing is strong Superstack. Our of continuously This is our processes, a for Rocket key built creation we excellence growth.

Our end-to-end that ecosystem; team for layers partners; as lastly, X robust multichannel and is these AI-driven scale of our brand. clients, layers: growth, and the of experiences comprised a create iconic integration Superstack The technology; proprietary and we efficiency. serves members engine X drives

dive highlights each from into few and unpack the a layer Let's quarter.

step the heart a system our them to is provide journey home, off the of financing flywheel. our and client First enters and finding privilege closing, power the we servicing the the At of each and becoming earn their beyond. of origination from journey our the that the ecosystem, a servicing very unique connects life. and servicing for ecosystem and with outstanding origination we the lender Once of lies flywheel, title experiences,

to announced subservicing us manner. Last in this onboard Rocket ecosystem into allows clients partnership our This provide apart. with origination experience to portfolio month, them with Annaly. sets December we and excited that an a capital-efficient a strategic these and partnership servicing Rocket amazing the We're expand servicing

speaks coming clients. same brings establishing innovative experience our relationship. mortgage long-term There's a operating rate to to that to that no additional back ecosystem, creating products even tailored ecosystem recapture more to leverage. clients market This love the our costs today's Rocket, XX% client industry-leading in acquisition people Our very keeps for them

is With clients up have affordable making product home our products struck beginning a a These since the purchase homeownership helping mind, of for of closer. suite X/X of the affordability year. our chord, leg of bringing this top volume dream get up

in by the example. seen our affordability relief X providing point We meaningful XX%. Welcome late in Our we've in August, Welcome rates product groups and Rate by X a for its more and launch Home recently homebuyers. Since launched Home second, is Rate year Break grow ONE+ than Break points the first great reduced

of our experience ground sits to Now where layer, breaking new delight and top our clients. we're on ecosystem delivering our

AI-powered chat functionality. our tremendous expanding gen have made strides in We this quarter

from handling of is contacting clients here are and round-the-clock This quarter-over-quarter. with all with chat key, refinancing We're not. our more clients have integrated business whether in seeing as growth live interactions hours. purchase fully regular or bankers XX/X across and us servicing generative Our chat logged outside XX% digital our than is significant now of to our doubled access everything platforms

Xx chat which, Clients interaction literal those deliver the the of real is experiences just compared number in who chat leads that to turn, is results. who insightful don't, growth are Beyond chance engagement from personalized, driving interactions, higher to pull. to Every to deepen chat client a credit use first converting higher conversion. in

best: what technology ante clients best, urgency We does our what often do to they team Responding our our with helping us clients. to play. most it do freeing is about need members when letting focus talk on the

test think of the than this recently hurricanes can't was that hit to most put where example I the during Southeast. the a better

While to technology-enabled in a situation, storm support We We clients. couldn't prouder our before dealing with real be digital We paths devastating tools playbook. response there our for tracked landfall. our team's time. I customized be our and quick, of the emergency activated

forbearance, Self-service them when suppression, servicing waivers and immediate nearly late IVR they options AI-powered connecting our chat website, credit effective our like support. needed and team fee allowed clients on get XX% personal seamlessly answers to to of

workloads next getting at significant provide to Thanks loans bottleneck efforts months this to we stage Quickly in critical by before. allowing weekly affected threefold process our steps a are automation move collateral through cut counties in toward the where to already months back in report the reviewing we push is reports clients' average place the be increase compared quickly and this times underwriter We help can this also disaster review clients our on But substantial. to XX%, delayed ago, closing. saw put review inspection for track. us to often

to technology. technology drive and is to powers profitable crucial Let's to and our market ability shifts. move layer to leverage The third the growth that adapt ecosystem experience: scale,

Let me quick two just examples. share

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fingertips. innovation Navigator need empowers engineer. has and with sentiment our apps, experiment without on no-code With team role-play data even automates drive AI members our interface, complex they to or team AI documents, summarize more create at analyst own involving the from their a their answers to AI people analyze now Navigator's queries, conversational Navigator's empowering scenarios. support securely,

logged nearly have queries, of in doubling is just And number a order been the That October. multiplying is since the active a over LLM of climbing innovators power it. love from months, more and XX,XXX magnitude. have X,XXX members results an they August interactions, at impressive. Daily Rocket launch, few Navigator nutshell. of than In users by AI complex steadily automating to By team are the

call In semantic purpose, driving resources, data out needs, build milestone, the Each that calls transformative ultimately points with calls and helps pain proprietary of in The power processing AI-powered through tags allocate a business. meta real-time loan processing calls nearly to insights address rates. week. more. we early results sentiment, a to system, equip We bankers and lets Logic. us continued create and Rocket AI million insights our of data conversion inbound to names, strategically us skyrocketed. recently Synopsis our provides also These We've higher valuable, that extract results specific all in our major call handle single origination expanded November, X reached these

in have interactions accepted. mind, client's creating have more driving With the journey, conversion. high-intent allows had it into us This right whether to they a an bankers, purchase meaningful submitted Synopsis, connect a we insight have clients offer or purchase with and home

brand the layer of the our last superpowers. The on brand. is stack Rocket iconic cake, is the icing of one our greatest The

will purpose its and coming homeownership. While already admired significantly identity, Rocket we impact in brand, is amplify this an year

managing in heads name with X/X Meanwhile, half just reshape past Hispanic. audiences households, be By first-time women of Over set homebuyers Hispanics of landscape: the surge, household on the XXXX, few continue over of are to first-time growth economic homebuying we've to wealth. will of female few. buyers, the and will months, women influence zeroed the to aging that a

will are. evolve Our clients exactly these to brand they where meet

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Superstack accelerates parts. us achieve forward. that sum execution is durable our empowers of whole Let we advantage clarity establishes layer me layer our and combines create to the of Rocket quickly is is a and Each summarize. set Each us on The greater than that will and unique stack to propels goals bold a them. to how

What strategy to our industry, with how proud in them who. we in me am just but day. in finance homeownership We've a so single technology of importantly, every deep truly world-class team Together, most in leadership key the what in alongside and the work the to to the and drive hand with poised bringing the needed the executives built are and excites best leadership work change industry. mortgage modernization in hand isn't expertise and, AI team, I

to going I started. where I'm close

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no the XXXX. a the creates an and market $X to us XX% for years, market reflects opportunity evolves That gets the capture how XX% and opportunity in And growth matter our coming market to share. our excited potential indicate mortgage Forecast ambition. our trillion origination in year-over-year

and benefit Rocket transform to to of millions We well positioned firmly homeowners. believe disruption drive industry is the

you. I'll with to Brian. turn it that, And Thank over

bigger I'd they and you, and Thank homeownership uniquely as we're come a positioned realities of the good stage everyone. seizing Varun, capture are to start setting and we to and why market. to responding slice like market afternoon, the opportunities how by framing

for It's couple the an industry. of been months interesting

of mid-September. nearly fixed X% in mortgage July third For X-week the lower, most window quarter, rates have to XX-year touching trended X% from a during

However, X%. XX-year the and stronger-than-expected fixed to mortgage indicators to quickly back yield XX-year economic jump caused rates

when but certainty, interest the is has it any with In to short, rates opportunity impossible predictable. market anything to scaling are itself. Since quickly predict the up capture key been presents market the

The third a was this. of quarter perfect example

to dipped near X the to briefly rates financed years who homes payments. clients X%, When at jumped lower their the past had chance in

production daily up purchase volume pipeline lift also surge. this our in months volumes during It reaching We scaled was improved, game-on brief in and as a we our quickly to a affordability moment, that the saw highest capture XX past window.

our and our of top-of-funnel a meet serve course, across funnel. our our of products boosted mortgage ecosystem, all Every including conversion innovative We execution technology experience, Rate board. leads with our the in tools moment, layer our played the Welcome and, Rocket of through service partnerships supercharge direct-to-consumer, to powering broker, and brand, clients. role Home Superstack, channels, more captured clients like Break We to promotion bankers the throughout launched more

hard we're the ready this for without increasing replicate. This flexed When we're to technology seamlessly fixed what we adding execution speed and act. to unique our platform. and building in others to captured costs. is with of power That's at Altogether, Rocket. us meant up windows lightning-fast the more opportunity scale leads industry of these It head or converted through open, count capacity and our

advantage brief officers train Relying most companies take missing advance. needed months in to mortgage opportunity underwriters capital likely opportunity loan of rate means licensed would entirely. X% the quarter, the drive in have to the on and To capacity human hire,

important when on goal market models. what of us, resilient our the typical in without staying Equally capacity up market or matter can capture tech flex the our opportunity our mortgage environment. down share market profitable traditional to we is Thanks whiplash at in layoffs focused platform, to throws the market seizing the any and we stay hiring No to contracts.

is nearly homes ago, Compared XX cooling signaling the And rate competitive fixed shared, homes. XX% grown has for inventory, When supply, we have price down measured share in bidding a trended XX%. sold Active the year-over-year, home reasons year XX-year to in optimism. listings we consecutive zoom a for months. the increased Varun the of above listing Housing out, has months of lower. by see for as

signs, we While year. momentum even affordability anticipate we there's still promising are challenges, more as head new and the these into

role our that with in success. outlook take credit performance, touch our more business I'll critical talk for the through investment-grade backdrop, our servicing value about origination I'll that financial our is on rating, wrap fueling our plays you also how for our AI I'll new Now fourth strong up flywheel quarter. and the QX financial unlocking and with

in. jump Let's

and and If I one grew to in a market share, up profitability basis. had quarter on it's sum We refinance phrase, year-over-year purchase this lights-out revenue execution.

billion, range. of fifth increase at guidance year-over-year XX% This from last Adjusted above represents $X.XXX revenue quarter end the came of a revenue and in growth. the of third high our year our consecutive quarter

volume, our We increases lock year-over-year included generated This marking net $XX in year-over-year both of quarter in refinance. XX% since a purchase growth billion and volume increase highest first XXXX. rate and double-digit the

Our posted home high. product equity another record

roughly over on margins basis period XXX steady margin From at to direct-to-consumer with XXX basis to climbed roughly year. points perspective, XXX basis channel a increased last Gain partner held points, same loan the our sold gain on network flat have our margins sale while have sale points.

make in million, driving growth, third and of profitable adjusted We margin EBITDA line EPS most Adjusted of X income representing million operational focus diluted to net and quarter on quarter efficiency Our $X.XX. was adjusted our combined a the leverage of reported $XXX continued years. top $XXX XX%.

we talk it's not in technology. When by creating powered our operating our profitability, growth by but about also line top leverage investment by only driven

navigate to markets dynamic what us Our tech platform is scalable empowers with agility.

the member industry directly it we're perspective, most gives in and is of to into same The it's benefit about achieving boost seeing Simply the powerful greater resources. with productivity AI my efficiency From put, translates operational more has team productivity. the adding long increase which a grow is capacity left excess through it the by runway. with and when technology costs. you're capacity. head market contracts, others and in We to capacity while inefficient And try inflated count, the unlock this

lock volume we XX%, more production X% net so that $XXX fewer without up we volume single rate did quarter. capacity to origination cost. a support we dollar volume, members the team We only Today, with proved handle was of have billion fixed adding Not year-over-year. this in but did

chats enabling are multiple review conversion. insights verification Our these automating collateral that and client income driving AI to and tools from gains, boost

recent Logic, lean, savings. saving proprietary we're improvements. resulting system, than annually, in savings. is loan a Rocket we're just ourselves team and to months keep than With XX% massive XXX,XXX more million is ago, driving constantly updates, us, it's over a and Operational hours But increase just competitive. $XX agile from cost AI priority in more efficiency our speed, origination member and us giving for rates X accuracy greater efficiency boosting and annual conversion evolving fueling personalization, growth. is top

flywheel. model is our origination Another our business of servicing key part

Day, discussed homeownership to way clients powerful future origination that home equity we've even to future while new Investor new be and to on previous or loan. organically our and refinance next clients. transactions, a attractive As with acquire clients form Together, us at allows an origination businesses it are calls us purchase, their source create and MSRs MSRs servicing flywheel positioning help

refer to business as what repeat Earning rate. we our recapture is

experience is become for Our goal a to home financing the is to that future exceptional that go needs. provide client we clients' all so

Our industry-leading experience. is XX% to client rate recapture the testament a

offer your earn that When extend opportunity at you something, you the ecosystem value partners. to excel beyond it own and your to

for capabilities powerful partners, flows costly partners. cash also MSR complex, to Our our risk It a owning as the rate our the Rocket both prepayment in-house strategies. a advantage high makes predictable is This is hedging reducing recapture origination and for it owners need more for MSRs. inherent win-win offsets for without

bulk as In portion portfolio. growing October, strategic subservice as new Annaly's through partnership well of strategy we This of subservicing our acquisitions. complements servicing MSR partnership to proudly announced a originations a organic

increase year-end growth year-to-date, the over and portfolio. our billion prime compared or XX% Across XXXX purchases, to balance loans $XX to equity balance. This That's service unpaid refinances. represents of represent for principal bulk to add acquisitions rate new acquired who term clients and XXX,XXX committed a home candidates and future we've subservicing,

XX, portfolio we book, mortgage billion of included unpaid which cash $XXX represents servicing principal annualized In $X balance. of our million revenue million of of an As and third represent September Together, our $X.X servicing X.X generated mortgage sheet. billion balance quarter, of the the billion on with of on cash basis. the with $XXX loans $X.X billion from assets a servicing available total value ended rights. $X.X billion of these quarter We approximately

cash consisted on of $X cash of of lines XX, of to an And available billion, Our at $X.X and of as $X.X loan credit. September billion corporate additional used balance approximately billion sheet including of the cash stood billion total self-fund plus $X.X available undrawn cash liquidity originations.

our decades. a Rocket financial that proud first a agencies X Mortgage from makes mortgage for a share funds. X service receive strength, nonbank and wider investment-grade to growth achievement This a sheet Mortgage Fitch flexibility status upgraded sustained profile grade. almost access investment Rocket funding company in strategy. As X This of sources testament the strong to range our highlights allocate big of I'm and positions to much recently continue to in This rating added us balance favorable the financial more to cost capital of of to way paves the at

fourth smaller on the in the quarter we to Turning than mortgage seasonality, be fourth outlook. the our anticipate quarter. typical Based third quarter to market

XX% adjusted growth of continued this market to and $X.XXX $X.XXX the share midpoint represents expect The to be We reflects year-over-year gains. range revenue billion range billion. in of

the in renewal banker be We our related third brand quarter. quarter fourth of and The restage marketing in quarter licensures. with spend fourth annual line includes the the expect expenses to to

on forward-looking visibility. our our is current always, based As outlook guidance and

and ahead, what's As optimistic we come. about we're excited to look

a and to We're that setting wide entire than excites goals in with Rocket long-term where strongest making Over What grow value our proving across has of investments, positioned and consistently highs to a capture for through only and is the before. clear our me just shared our an ambitious what scale thrive. bold range creating organization. navigate it's it ability disrupt, years, This execution, both is shareholders. isn't thrive ever takes focus industry Rocket the accelerating all better on at markets, most I've optimism mine, now lows. seen us

ready for With the that, to we're it to back over turn operator questions.

Instructions] comes question [Operator Adelson your Jeff first from the Morgan And from of Stanley. line

sort sequentially. with gain what outlook guide? other you on decline roughly behind fourth start the in drivers in could looks volume there? of for on you Or It break that Brian, revenue a you're maybe quarter. Can seeing the the out for XX% what XX% range like just versus sale Maybe, embedded you're are looking margin to the there, assumptions

your for thanks Jeff, question.

QX. me to just just I few a on saying ask and And very it start that important on Brian gain by about then I'd the Let in margins. And that chime are mind sale to we start, guide. good there's things think our feel I'll in comes when keep to

just the to fourth when be down And You about think post-Labor than primarily, that due bit a smaller typically slowing bit Day. you is, why it's a really homebuying expect quarter QX. to little little

You've back to got kids going school.

the holiday season. got You've

financing top not is just typically mortgage of So mind.

little The on is up that you've second applications. impact would interest a thing tick rates obviously I an share that has mortgage and bit, seen

so for can It's and in together, it great you big definitely that just quarter. market have size share market on guide. year-over-year we the really effect strong But guide on with factors just on be resilience the going two is grow believe gains call obviously is just put And the able I'll And And this we and guide growing continued these a our XX% any to the confident just higher end our have and focus reflects and execution. quarter. also that still market. our just that to whatever a out when is to And the big is. share at focus be day, our an of compound market

ask let comment to And further. then Brian me

we We bit that's touch expansion conservatism to because holidays. a in expect plays margin around sale some the see in little compared on of and QX There's Sure. in do Yes, some on sale I'll there, Thanks, margin gain pricing do just gain third slight Varun. competitors piece. built the typically on a the quarter.

you a If and in either shoes, once to have ticks down, same while, you're volume about pressure pricing this about you think see way their amount there. in we Every point. and of it, capacity some the Varun's

we've that in considered So the guide.

you for exactly But we channel, time getting expand. That that we said back of we've expect pre-pandemic. direct-to-consumer on sale just I are on historical now happen a basis. doesn't kind if zoom an linear that in to And long gain out, margins particularly to healthy seen that to levels, if individually, really levels are partner and a we've the close at look

And you just level interest for refi quarter, that, on is XX% down sort assumption end since refi last know I XX% and is of of the total the about volume quarter just the level rest down the quarter. are the rates the app embedding maybe the of index for just for by or of current quarter? holds

may curious, just assuming be now? better a getting just So are they little things are you or bit hold where right

to the quarter, consideration guide, mean, start in direction. to into information point the volatile we the Rates set we that. There's moved a the question comments. when we have take about if in no the up obviously have sort about of It has been I we what Yes. do all think opposite Varun's this to we Jeff, quarter.

taking thing, if the leave So fourth look you guide is truly believe we that in a takeaway, important the MBA at in. The is share were most at look Blue. baked of this quarter. Optimal to But that, all I is with applications, we we

line Nash question next Sachs. Ryan comes from Goldman the Your of from

industry look year forecasts originations, a call obviously as maybe in are next to ahead, calling we nice up it, XX%. So for pickup

your your can and the about revenue a an But And and size between are think needing on you any given your curious then comments how improving just you about And progress little about how $XXX things the much so of make sure market into bit on moving how the fixed you to goals. relationship the I maybe rates fluid drill think growth XXXX. are wanted billion in share Obviously, how around. do market? expectations I'm market, in mortgage just cost, cost not given

our easy a obviously, factors for Thanks Ryan. there's I'll then the you question, start multiple is to in as Brian few And market, by to saying But factors, the comment I'd not in on, well. that at when ask general, jump optimistic. just is predict. and look I'll that mortgage outlook

still I think the obviously, things And signal rate a the of that the expect until to it's economic going health. on system. clear environment. the treasury out way consumer first confidence. is And unemployment, XX-year multitude part things obviously, can the in of little the with, that, bit CPI, that is a general, thing like then, the mortgage. it's And things go a reality that be to pressure you of working there's system, fixed-rate inflation of those start its But there's XX-year and into is correspondingly,

there is some we're part GDP. And the The next thing of that Obviously, thing we a big seeing definitely rejuvenation. look at is the housing good signs market. the housing of is market the

inventory. You've got more

at more below selling homes are list. got You've or that

of You at at to homes got X.X months went sale, when that's equity look X.X XX%. And is an from X%. housing months. up number you high. inventory, up all-time we for Affordability listed The

that we there market look expecting at will market. 'XX. And that share still of things happening a your regardless happening things And compared of the grabs. be in conditions, over up then size up point, trillion. past confidence so the The year. good there. to $X gives this And plenty there's the market, for right? up XX% huge That's good really some So that's us forecasts are To of

that something is and look is part big thing important feel And is competitors. would the a our also of to really able to say And market. believe tailwind just any to we a we Superstack we our tremendously that our what I what confident most at execute execution, relative be ability against in. is then to that's in our And Superstack execute

together, being that we that certainly and 'XX than better that's outlook. think our of us and all 'XX about 'XX, 'XX%, a putting of for we gives know optimism how that And kind so lot was better than

to side, I'll the ask on then Brian And in. jump expense

it you at in if year. think, Varun's 'XX. comes bit think we've when quarter Thanks, it's back I see look think We'll be I I the to do I X think will sure. about things. we're done than years fourth going out. how what Ryan, is still the mean to you this back, better Yes, down operating But starting the big scheme as point, for pretty think of first point market be a To at the ahead I 'XX, still and leverage, question. shakes looked 'XX a look

couple printed So I year, of good work all XX%. that years. double-digit lot X done And expansion that about the I'm line things quarters proud take in about do. we've cost the been EBITDA year-to-date, being If said, margins. top growth. over taking really EBITDA margins doing talked in is on of we'd We've and the is share of margin, the a It's the past what every through we But quarter that. single we the kind side in most said this that's

So to trillion you do, XXXX which Varun's XX% to that is a ahead it's $X point, believe healthy if we market. XXXX to going market XX%, by be than to healthier, you and look a really

we're Investor our we some And Day gain share in So to are that goals what you seeking shared achieve. expansion course, of exactly believe at then, there.

the fourth The is in to example another gains. of third achieving that. us keeps right track guide share The quarter those on quarter

help pretty operating to taking very little 'XX, XX%. the opportunity say, in from leverage excited about the margins hey, market of I if this bit increase were a the market, us year share EBITDA tough So A year. gets in next and

market and look just a you just as Maybe about think $XX do 'XX, to it. what talked bulk about billion opportunities, follow-up, purchase MSR about talk, is Maybe flow you of you bulk of And the you for how much Brian, more what thinking in the continue appetite year-to-date. have. ahead as look add Got the just capacity talk maybe And MSRs like? this to to business? area

Ryan. Thanks, Yes.

talked in still and So an we want in may our right very I'll MSRs about. start interested waterfall in. deploying But excited we're add bread-and-butter. the area here, at that about Varun It's capital, we talked our remain and definitely top. being it's right When to about capital

You mentioned the $XX billion.

excited deal. seen asset most effect proud XX% news, really been opportunity this And and about have recapture world-class this you the Annaly it's But you're for is decades XXx have compared the our cash the manager. flows that you in about, flows driving we next now I'm things of efficiently. really One flywheel servicing the we're guys we're loan the very collecting business, revenue the impressive, rates, a Annaly to when of very think is of all cash that. collecting,

priority. asset very double cash to those bulk So us. you but those I in-house on acquisition us your you in be both origination the protecting a is to subservicing also continue have market Because #X you aspect down where good were if but didn't to are seat manager, expect to really the a think interesting from opportunities, capability, flows an there has

this can or recapture risk. And good. protect thinking you offer, choosing which also recapture here, have the rate if subservicers, you I is And asset allows something really it thing protect then don't winning CPR you're about against against multiple-year between does one rate. an is J.D. others that And manager prepayment experience think to Power, sitting the and that have

expect 'XX. I be going to it a big into So strategy our of part

I we because right power the earned four the just would just to of the a that add we've walls to beyond others just with showcasing illustrates example like MSRs something is extensibility really cool in way capabilities Annaly. these take platform. and scale benefit that it's And this our how

the The the for via as brokers also being with same extended as TPO. same for value integrating You'll is create a mortgage to our serve, banks. see doing us technology to thing platform platform platform

And And capabilities, data-driven technology, in beneficiaries insights, notifications, that, Brian to as mobile, we recapture become capabilities that in the AI, innovation. about, the each our investments only talked that CRM we on of as going to with extend top invest get of these personalization. are capabilities platform, better of then parties

is parties that lies And can it power idea something we're that very of excited run and the extensibility multiple you so can something really, anywhere, its really the in that benefit write you platform about. once,

Your of DeVries Bank. the next Mark question from from comes line Deutsche

level. slower busier of as the at headed rate detail kind But the they refi, in period on I mortgage X%, in Brian rates context how purchase this hoping locks And how get little down were on around to quarter and rates on also closer periods? versus to and any period sale moved high touched a when how the a was up. both more back during moved gain margins compared your

the Appreciate Mark. Thanks, question. Yes.

study I X-week there really good down mortgage came at where the low notable think it's window to, a I into And think was September. to work. our a such I So Xs. in strategy case month the think were two There of what And referring that's rates things. you're

that rates it races. when off are into is, we first proved the get low to the One, down Xs,

that. You X of about mortgage north production have of years

So and there's consumers and term definitely from benefit a can we a that. bunch refinance, saw of that rate

Mendoza the your first That's Line thing that's there. So of sort note. to

you As races. low those Xs, off you're into to get the

to and we're this thing us But that building is a the very it to how about gives case, impactful you if is, you very proof second ton had capture window short consumers and high-intent demand. because, a bunch of think in how points what that of very, consumer opportunity, with a

ability that differentiates very the between and what quickly competitors. scale to and capture our exactly So is us up

If productive. demand bankers from allocating and and important that in about but underwriting service, it's that's handle low perspective, to obviously, with a keeping and bankers client coming able a effectively demand just very about coming level it very demand you it, think the about to taking your but expects with same just the in closing and closing processing, and that important, time, your is of very, being same also client high so it not because a it's efficient

during also engage to off clients interact be that advantage and the and going going the to capture very with they money, to saving the better is can the Because because more of with share client off period. short during that because be window are take going to they're it, we more better we're

course, the was of we And leading was points, XX that, did Fed actually cut on consumers to plan to are basis at the ton But and of what up. sort of it. went rates rate. it prove then meeting. us very interesting. we that a know It one, money in So Fed didn't up And there it happened after The that.

us interesting of I'll taught just that the sort change because, leave couple-year Mark, there, clients in you with is think a the one if period. have thing the the over were last pandemic there And financed thing, consumer is I multiple times

fast not for are for going long truly this a rate to time today, house but time." forward, they're this long mindset of, a mortgage, So in have the consumers "I I'm have a may when getting

And the a of transact week clients part sensitivity is a so during expect, of both, because there's our moving. just inbounds at treasury argue, mortgages of the our clients, XX-year about ton companies their which from now course, And high. around interesting it rates and lot rates, you'd from couple the from are that window, service got had we all-time mortgage I headlines other of clients propensity is to from but and clients, would that for how an to

our track just team that we're gains. We're it's up we're almost save the is in $XX bit fixed our Mark. LOS, Logic, why so in roughly million cost is while on hours and this about That's thing And investments is AI. proprietary And add efficiency Rocket XXX,XXX months, XX% annually. obsessed only members is that just which we've obviously, would keeping, achieving driving capacity, X made The little in a with asked And same. I that big savings. our to the you

of you analyzing appraisal all we're with And modeling, are of bread-and-butter just credit our make is this they're underwriting, reason is aspects business, reviews, the upwards over of mean client capabilities implementation of the infrastructure, in these applying benefiting I capital years $X.X all automating AI continuing interactions, the market models when that we've think that. processing, this why about billion so the mortgage from to because investment. document automating to spent the past all And progress. invest business we've made work. X so And the on obsessed AI, and

continue to well. be had we significantly to and the in do future there's will as think We so, gains more

Your question of comes line Jefferies. the Derek Sommers from from next

portfolio is to going any share Annaly on I detail how the the if work. you characteristics was share wondering recapture economic incremental could maybe or partnerships,

disclose, we question, very safe that's it's the for economics important where Thanks Annaly Derek. being to prepayments protecting good don't obviously, at, in. at But is say, We look things great that against our to come a I asset us. Yes. world-class the think you of is the manager, when partnerships. And

efficiently, if at expect. look agreement, clearly, So just subservicing own there's servicing. you a as that our you'd very We do

we to deal about really can But this I think interesting And the recapture part we that's the opportunities. think that offer. superpower is more

makes that on of it, economics a win-win happy side, truly to we're think on if then, partnerships. course, do about the and And subservicing So It economics Annaly. there's with the recapture for there's you side. the

win-win. we great lot "Hey, servicing, great firms truly to we and it. have our capital-light So sort of solving do of, but challenge So it." need a of really it's it's it's protect more X bringing a we and a challenge "Hey, against servicing," have to together And of, their way

And kind potentially product are with what it. Are rate-agnostic? you you there? products, second consumer to viewing of as Got the then On just a interest behavior change gears this seeing lien for second.

there's lot to I want too. and There's to can start of no room product. that Yes, in then I Varun about add, a it. question might run think

of with for planning unless and is there's the chunk study and, available and note homeowners time kind just that's quite mortgages of of big movement. refinance on, If all rates rate the some just you rate little X a for the north just moving. there is there out we of is of outstanding, that's as remain touched course, But there on a term of another X%, will definitely likely bit kind chunk X.X% out

that So and makes I very client of sense makes making term client start particularly a generally back do speaking, as lot time. is rate and period we're on if more to it in of rates that sort where a And are product, for there, can some become couple great But in equity the product cash-out of touching even, quarter saw low the happy we sitting it think home of do again, consumers consumers where sense sense for out sense well. those make as them, think start refinances the long for that those and to you rates. X%. about the extent, going we product a it's for a a think week favor lot to during

And by of the move second on thing of the little but consolidation it internally a average by refinance client, opportunity an bit, And is a of for weighted the in a X the X lot about then note ton the terms loans. way, you the up when sense makes that layering rates bring talk of do we those and have rate does if liens. interesting

is in our Yes. I approach that, where general, add our clients and are. they innovate to would meet just

products we a services clients there. opportunity, if And to so market we and will our build see meet

And just so where there's focus but example clients. on room to grow really is our of value there, we this delivering to an

is, this, new would also like for out client the existing And that important that base then What brand also call our I clients and for build base. Rocket franchise. thing client it's we just other products to attracts this the actually is for to Rocket we've our not products the seen but

and become thing lender that products their us to this And really about that's a in, we offer allow bringing And them can product services great offering. them then life. so for by additional

And UBS. your comes final from the Doug line question of Harter from

it take hoping from we different just and Just could expenses about talk a angle.

capacity the you capacity, cost take about down outlook for is there that, volumes, of comes the that fixed said even if that means given out opportunity, to billion, $XXX somewhat? Given

that like Thanks into on QX but a bullish market. outlook our I'd being I XXXX bit is way on question, has and answer our growing would Doug. views capturing the very for been And about the than We the higher. volatile anyone just primary talked admittedly, XXXX. mean, focus still the is more share

cost what that being does fixed focus a our is able a grow into And to continue do leverage. to just it share, right and relatively is market, really flat base. now, capture operating So it increases larger with

just if I look if rate expenses XX%. was QX. at on from QX Even But volume at numbers look think basis, lock QX from up QX, mid-X% up I were just I the a to

terms we'd do So you exactly said operating can what see in we leverage. us of doing building that

here question, effect the provides it goal traditional there's course, the markets. in But to life option yo-yo market. no mortgage Of for is value, our avoid different of

if And people, through people think most grow they too. some how capacity, hiring, and it do will about we hire you

takes best team best the business being in is for officers the it members the time. and the have business. hiring in the loan that a not always most said, anything, But long We way efficient

have recruit to people. You

to have You train people.

You people. have to license

example So you of in the no is third need where a good quarter someone. That was X-week very long couldn't such runway. a period you There chance. hire

maybe out that to little your that, were really if miss to capacity and opportunity. a only increase way you with So bit was a big going of overtime,

focus So can I the going share. say way 'XX is most we folks is The absolutely think I our it better, news simplest take believe our growth. be believe to good is, And we'll is is focus leverage. operating and increasing

from growth expect we those of So angles. both

advantage the Appreciate versus the in that, in recognizing Brian. market what of too those ambitions? how think saw having kind of right much you growth about having kind factoring capacity take for XQ, capacity level even like I is the to you spare importance pockets capacity opportunity do of of guess, of the

And say, a expand that it's the I have just we're think or the at And now right what end to day, detract. would market. Doug, we I is not looking sort the perfect of capacity. huge of

we're scaled as technology. and to going that they're making and result the value, a successful incredible provide members team Our become in investments of very

us capacity. our feel us market. to We're We ambitious very think allow and impact that efficient. so more more our good aspirations. members our to really growth about will share. the of especially It's continues we think as about make will it technology team We And grow, to allow a big it take

about so And feel where we we really are. good

to the Varun our I turn And now session. over that concludes will closing question-and-answer call back remarks. for Krishna

we to for you, Thank next look everyone, and thank to Well, you. speaking forward you again with quarter. our call. listening excited, We're

you This concludes for call. your participation. today's conference Thank

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