Rocket Companies, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Rocket Companies Inc. 4th Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, John Shawcross. Thank you. Please go ahead.

Good afternoon, everyone. Thank you for joining us for Rocket Company's earnings call covering the fourth quarter and full year of 2020. We're excited to share these strong results with you, but before I turn things over to Jay Farner, I will read our disclaimers. Today's call is to provide you with information regarding our fourth quarter and full year 2020 performance in addition to our financial outlook. This conference call includes forward-looking statements. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the earnings release that we issued today, as well as risks described in the filings with the SEC, particularly in the section of these documents titled Risk Factors. Our commentary today will also include non-GAAP financial measures. Reconciliations between GAAP and non-GAAP metrics for our reported results can also be found in our earnings release issued today, as well as in our filings with the SEC. And with that, I'll turn things over to Jay Farner to get us started. Jay?

Good afternoon and welcome to the fourth quarter earnings call for Rocket Companies. Before we discuss another incredible quarter, I'd like to thank our 24,000 team members, many of whom are listening now. The excellent results that we're about to discuss and the innovations that drove them are a testament to your focus and dedication in what was an incredibly difficult year for the world. Your contributions to our clients and communities were a shining example of how successful our for more than profit mindset can truly be. On today's call, I'll be speaking to a very important topic here at Rocket Companies, our platform. The platform continues to be the key to our long-term success in the verticals where we operate, as well as the record results that we've achieved in 2020. Over the next few minutes, you'll see how the technology that we've built and refined over decades will continue to drive success, not only in the products that you're familiar with today, but also in product extensions and entirely new verticals in the future. If you were to ask us what our most important product is, We'd say it's the platform itself. In walking through our results, I'll provide updates on each of the key pillars of the Rocket platform, our technology, the strength of our brand, the Rocket Cloud Force, which I'll discuss later, and our data science foundations. I'll finish today's remarks by talking about how our platform allows us to continue to grow and become more efficient in our existing lines of business while also launching and rapidly scaling new businesses. Our mission over the last several decades has been to take the most complicated and stressful transactions in life and simplify them with technology. Whether those transactions are mortgage, real estate, auto sales, or any number of new initiatives we're currently incubating, we provide a simple digital process, exceptional client experience, and certainty. This mission began in 1998 when our founder and chairman, Dan Gilbert, wrote an email committing all of the company's resources to moving online. His vision was simple, but decades ahead of its time. Most of the internet companies of that era focused on problems like search, advertising, or basic e-commerce. Dan saw things differently. He spotted the potential to take the most complex transaction in a consumer's life, the buying and financing of a new home, and leverage technology to make it accessible online to consumers across the country. For more than two decades, we've been quietly building our technology platform right here in Detroit to transform the way our clients experience life's most important events We've continued to strengthen our digital products and infrastructure in 2020, deploying nearly 4,500 product features throughout the year and delivering improvements to our platform every 28 minutes on average. Supporting our platform is our strong national brand that consumers and partners know and trust. As we grow, we continue to invest and find new ways to extend our reach and expand our marketing channels we leverage, allowing us to connect with more and more clients. I'm pretty sure the majority of you were among the nearly 100 million fans who watched the Super Bowl a couple weeks ago. In that game, we ran two 60-second advertisements highlighting that certain is better when it comes to buying a home. We aired one commercial highlighting Rocket Mortgage and our technology that helps bring certainty to the home buying process, something that is needed now more than ever in today's red-hot real estate market. The second demonstrated the significant role mortgage brokers play in American homeownership As you know, brokers are important partners as we continue to extend the reach of our platform. This massive exposure, the first ever national advertisement showcasing brokers during a Super Bowl, allows them to align with the power of the Rocket brand to create differentiation in their local markets. Our ads were ranked numbers one and two on USA Today's ad meter, which I am certain is the most prestigious consumer ranking of top Super Bowl ads. This means not only were our ads loved by millions of consumers, but also received tremendous lift and visibility through social media, news articles, and TV networks playing our ads for free. All told, our Super Bowl activation resulted in more than 3.3 billion consumer impressions. When you look at the areas where we continue to excel and set the standard, you see both a company and a brand that some of the most well-respected organizations in the world want to associate with. We've talked about our relationship with American Express, with State Farm, Intuit, Charles Schwab, and others in the past. On our last call, I also hinted that we would soon be announcing a new partnership. Today, I am happy to share that Morgan Stanley and E-Trade have entered into a new agreement with Rocket Mortgage, where our company will originate, close, and service conforming mortgages for their clients. This arrangement allows Morgan Stanley to continue focusing on its jumbo lending while allowing Rocket Mortgage to provide conforming loan options to the firm's millions of clients. We are very excited about this opportunity, which will kick off this year. Another pillar of our business model is the incredible Rocket Cloudforce, now consisting of more than 6,600 U.S.-based professionals trained to advise our clients on complex transactions. The COVID pandemic truly proved that the power of our rocket cloud force can be harnessed anywhere, as our team members work from home in locations across the country. The versatility and skill of this team allows us to continue exploring new verticals and services. Our ability to build, train, and license large-scale sales teams provides us a significant competitive moat. Today's consumer expects simple, powerful digital experiences backed by support and consultation from trusted advisors. The Rocket Cloud Force's ability to seamlessly integrate into the online experience with timely, accurate, and actionable information is a game changer. In markets where the legacy experience can be confusing and discouraging, like buying or selling a home, searching for a car, or considering a personal loan, our digital solutions and trusted advisors provide confidence and certainty. Along with our powerful Rocket Cloudforce, our company also continues to rapidly grow its use of ethical artificial intelligence and machine learning to streamline the business. This acceleration is made possible thanks to our vast data lake, which includes proprietary first-party data on more than 58 million consumers and extends to 220 million consumers in total, or 85% of the adults in the United States. We have the benefit of millions of clients working with us each year to buy a car, get a personal loan, buy a home, or refinance a mortgage. And we've been able to leverage this information to build sophisticated models to ensure our brand is in front of our clients and top of mind when they're ready to transact. In fact, since the beginning of 2019, data science has driven more than $75 billion in application volume. The importance of data cannot be overstated. It is this information that allows us to quickly innovate, anticipate the market, and in some cases, develop new companies altogether. These real-time insights are a significant market advantage and consistently guide us to the right decisions with incredible efficiency. Together, these pillars of our business, our scalable platform, our national brand, our rocket cloud force, and our strategic use of data combine to create a technology powerhouse that continues to accelerate at scale. Consider this. It took our company 25 years to close our first 1 million loans. In 2020 alone, we have helped more than 1.1 million clients with their mortgage, automotive, real estate, or personal loan needs. Innovation and execution paired with a highly trained Rocket Cloudforce creates a flywheel that continues to rapidly accelerate. I'm even more excited about where we're going in the future. Just three years ago, we launched Rocket Auto with the belief that we could leverage our platform and Rocket Cloudforce to help simplify the process of purchasing a car. Everyone knows buying a car is complicated and intimidating. It's an experience that few consumers look forward to, but we've been able to make it approachable and enjoyable. Starting from zero in 2017, we've organically scaled Rocket Auto to more than $750 million of gross merchandise value in 2020. Now that we've validated the model, we will continue to invest in accelerating the growth in 2021 and beyond. Our partner network is another increasingly important growth driver for Rocket companies. We continue to evolve and diversify from our original direct to consumer business model. Partner volume made up 38% of our closed loan volume in 2020, up from 23% just two years ago. We view this evolution similar to Amazon's past decision to open up its marketplace to third-party sellers. Like Amazon, we've built a proprietary platform and have the capacity to process millions of transactions a year. The partner network brings growth and diversification to our business. Supporting these efforts, in late January, we announced that we launched a directory of nearly every broker in the country on RocketMortgage.com. We then promoted that directory with the Super Bowl ad that I mentioned earlier. The impact has been tremendous. In less than a month since launching, we've had tens of thousands of consumers visit the directory and click through to contact a broker. All of these elements together have created an incredibly profitable company that has shown an ability to grow, strengthen, and scale in any market environment. The fourth quarter of 2020 was no exception. All of our businesses performed above expectations, leading to a full-year adjusted revenue of $16.9 billion and adjusted EBITDA of $11.1 billion. As a result of our exceptional financial performance, Rocket Companies has generated substantial capital, and today we're excited to announce that we are sharing our success with our shareholders. As Julie will soon explain, our board has authorized a special dividend of $1.11 per share for holders of our stock as of March 9th to be paid on March 23rd. We're also accelerating our long-term approach of launching and scaling new businesses from the ground up. I'm pleased to announce the creation of Rocket Labs. Rocket Labs' mission is to incubate new businesses within Rocket companies that leverage our platform and provide our clients with services that complement our existing core products. Our approach is to empower small, independent teams to work on big ideas and concepts, which will form the core of our future products. We are excited about Rocket Labs and the possibilities it represents. Before I turn things over to Julie to share our financial results, I'm going to take a moment to give her a proper introduction. Julie and I have worked together inside this company for 17 years. During that time, she's led the finance and accounting teams and done a tremendous job managing all aspects of our liquidity. It's Julie's foresight that has helped us continue to grow in all market cycles. Not only that, but there's nobody who knows the financial side of this industry better. We're all lucky to be working alongside her with that introduction. Julie, take it away.