Rocket Companies, Inc.

Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to the Rocket Company's incorporated third quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Thank you. I would now like to turn the call over to Sharon Ng, Head of Investor Relations. Sharon, please go ahead.

Good afternoon, everyone, and thank you for joining us for Rocket Company's earnings call covering the third quarter of 2023. With us this afternoon are Rocket Company's CEO, Varun Krishna, our President and COO, Bill Emerson, and our Chief Financial Officer, Brian Brown. Earlier today, we issued our third quarter earnings release which is available on our website at rocketcompanies.com under investor info. Also available on our website is an investor presentation. Before I turn things over to Varun, let me quickly go over our disclaimers. On today's call, we provide you with information regarding our third quarter 2023 performance, as well as our financial outlook. This conference call includes forward-looking statements. These statements are subject to risks and uncertainties, that could cause actual results to differ materially from the expectations and the assumptions we mentioned today. We encourage you to consider the risk factors contained in our SEC filings for a detailed discussion of these risks and uncertainties. We undertake no obligation to update these statements as a result of new information or further events, except as required by law. This call is being broadcast online and is accessible on our investor relations website. The recording of this call will be posted later today. Our commentary today will also include non-GAAP financial measures. Reconciliations between GAAP and non-GAAP metrics for reported results can be found in our earnings release issued earlier today, as well as in our filings with the SEC. And with that, I'll turn things over to Varun Krishna to get us started. Varun?

Thanks, Sharon. Good afternoon, and welcome everybody to the Rocket Company's earnings call for the third quarter of 2023. It is such an honor to be here with you today. I'd like to begin by sharing why I chose to join this great company. Rocket is a business I've admired from afar for a long time. In my view, it's among those on a short list of companies that are working on a truly worthy problem to solve. We're at the heart of helping Americans achieve the dream of homeownership and financial freedom. According to a Bankrate report, 74% of consumers surveyed ranked homeownership as the number one aspect of their American dream. surpassing aspirations such as retirement or a successful career. Home ownership represents stability and financial security and often serves as the single best way for people from all walks of life to create intergenerational wealth for their family. I was also drawn to the huge market potential. The more than $5 trillion home buying total addressable market is massive Maybe take just one part of it, the mortgage market, which itself is sizable at roughly $2 trillion, and yet independent of rates and inventory remains highly fragmented. According to Inside Mortgage Finance, through the first nine months of this year, the top 10 mortgage lenders comprise just 38% of the total origination market share. You know, home buying represents, in some ways, the last frontier. It's a category that is often associated with antiquated manual processes that remain highly complex, inefficient, and time consuming. Across the industry, the average time to originate a mortgage is more than 40 days from application to close. For documentation alone, our proprietary platform, which is responsible for extraction, classification, and application, processed 39 million documents over the last 12 months alone. Now, the benefits of digitizing documents and automating discrete tasks at such enormous scale have profound benefits for our business, from enhancing productivity to faster turn times to higher decisioning accuracy. If you take just underwriting as an example, An underwriting decision requires the gathering and verification of thousands of data fields, which are drawn from disparate sources and formats to populate key categories like income, assets, collateral, and property and credit profile. And we've already made significant headway to simplify and digitize the loan origination process. And with our early application of generative AI, we know that our progress will only accelerate based on what we have witnessed firsthand. Now, just imagine what can be done when we apply this transformative technology across our business and throughout the entire home buying process. Now, since starting in this role, I've completely immersed myself in the business. I spent countless hours going deep in conversation with our team members with the goal of better understanding our company's culture, our products, and the components of our client experience and where our frontline team members really see the opportunities. Now, on my first day, I invited our team members to share their perspectives and questions with me, and they responded enthusiastically. I've had the chance to read and respond to hundreds of pieces of feedback, and the passion and dedication of our team members has absolutely blown me away. I've also had a chance to experience our culture of innovation and putting our clients first. We have a rich history of winning awards, but we never rest on our laurels. We believe excellence can always be improved upon and are obsessed with finding a better way. Every day, we live the mindset of every client, every time, no exceptions and no excuses. This relentless client focus enables us to thrive through the inevitable ups and downs of mortgage cycles. Now, another observation for my first couple of months is just how well positioned we are to lead the transformation of the industry through generative AI. I believe we are now approaching a critical inflection point in the world when artificial intelligence, knowledge, engineering, machine learning, automation, and personalization will change every aspect of our industry and our lives. I believe AI will be at the center of how clients buy, sell, and finance homes. We will quickly and efficiently provide the best end to end experience across the home buying industry. Now at Rocket, This effort is actually already well underway. Today, thousands of our bankers and underwriters utilize RocketLogic, which is our proprietary AI-powered next-generation loan origination system. Now, RocketLogic intelligently generates tasks to seamlessly complete the mortgage origination process from application all the way through underwrite. This, along with other tools that Rocket has, automate routine and complex tasks, enhance productivity, and ultimately drive a superior client experience. In August of this year, we delivered 20% faster purchase turn times and we reduced manual touches by more than 20% compared to the same time last year. We have a strong foundation in place and a wealth of assets at our fingertips to leverage generative AI. We have data and scale that most fintech companies would be envious of, and we believe no one in the mortgage industry even comes close. For example, We have 10 petabytes of data in our environments. We have thousands of attributes in our clients that give us an accurate profile of who they are today and how we might help them achieve their dreams of tomorrow. We generate over 50 million call logs annually, which we use to develop technology and processes to continuously improve upon our client experience. And we've already begun expanding our AI capabilities. In a single year, we used AI to generate approximately 3.7 billion customer interactions and decisions. This is just the start. While Rocket is the established industry leader and a technology trailblazer, there's still so much opportunity to unlock across our business. From lead generation and allocation to underwriting, closing, servicing, we will harness the power of generative AI and revolutionize the home buying and financing process to help everyone experience home. My career has been shaped by world-class mentors and disruptive technology companies. I've seen firsthand the power of innovation and AI to transform industries and capture massive opportunities with products that are used by millions of clients. As I look around Rocket, I see a company with the talent, the culture, and the assets to drive meaningful disruption and transformation. I am beyond excited for the tremendous opportunities that lie ahead of us. Before turning it over to Brian, I'd like to say a few things on our third quarter results. First, I'm extremely proud of our team members for the work they've done and the commitment they've shown in the midst of what is obviously a challenging market environment. We grew purchase market share and reported strong results for the quarter with adjusted revenue north of $1 billion, which is above the top end of our guidance range, reflective of continued momentum over the past four quarters. This was the result of strong execution and continued expansion in gain on sale margin. In the third quarter, we turned a corner and achieved positive adjusted net income. And for the second quarter, we achieved positive adjusted EBITDA and GAAP net income. We feel good about these results, but we're even more excited about disrupting the industry as we work to write the next chapter of this great company's story. I look forward to updating you on our progress on our next call. And with that, I'll turn it over to Brian.