Key Takeaways
- Rocket Companies delivered annual revenue of $6.7 billion, a 31% increase from the previous year, yet reported a net loss of $234 million versus a $636 million profit in 2024.
- The company’s diluted EPS fell to $(0.05) from $0.21 in the prior year, pressured by elevated expenses and costs related to major acquisitions.
- Fourth-quarter net income plummeted 89% to $68 million even as revenue surged 52% to reach $2.69 billion.
- Shares of RKT tumbled 7.7% during Monday’s trading session, settling at $16.79, following the disappointing earnings release.
- First-quarter 2026 revenue projections of $2.6–$2.8 billion incorporate $150 million from a warehouse interest accounting methodology change.
Rocket Companies (RKT) experienced a sharp 7.7% decline on Monday, finishing the session at $16.79, following the mortgage giant’s disclosure of an annual net loss for 2025 despite substantial revenue expansion.
The Detroit-based lender reported full-year revenue of $6.695 billion, representing a 31% jump from the $5.101 billion generated in 2024. However, the impressive top-line performance couldn’t compensate for mounting operational costs and financial headwinds from strategic acquisitions.
The company swung to a net loss of $234 million, marking a dramatic shift from the $636 million profit achieved in the previous fiscal year.
Diluted earnings per share for participating common stock registered at $(0.05), representing a significant decline from the $0.21 reported twelve months earlier.
The company emphasized its adjusted EBITDA of $1.281 billion as a better indicator of core operational performance.
Mortgage origination volume expanded 29% on a year-over-year basis, with both the company’s Direct-to-Consumer platform and Partner Network experiencing healthy growth. The firm’s non-mortgage service offerings also posted gains throughout the period.
The servicing portfolio’s unpaid principal balance reached $2.12 trillion, accompanied by increases in both mortgage servicing rights fair value and servicing fee revenue.
Fourth Quarter Results Disappoint Market
The December quarter reflected comparable trends. While revenue jumped 52% to $2.692 billion from $1.769 billion in the year-ago period, net income cratered 89% to merely $68 million compared to $649 million in Q4 2024.
This disconnect between robust revenue growth and weakening profitability appears to have triggered Monday’s sharp selloff.
Rocket finalized two transformative acquisitions during the fiscal year—purchasing both Redfin and Mr. Cooper—which resulted in substantial integration-related expenses. The company also completed its Up-C corporate restructuring initiative in 2025.
Additionally, Rocket executed a comprehensive unified brand repositioning campaign and significantly increased marketing expenditures, driving customer acquisition momentum and expanding Rocket Money’s subscriber base.
First Quarter 2026 Outlook Includes Accounting Adjustment
Looking ahead to Q1 2026, Rocket projected revenue in the $2.6 billion to $2.8 billion range. This forecast implies year-over-year growth of approximately 151% to 170% versus the $1.037 billion recorded in Q1 2025.
Investors should recognize, however, that this guidance incorporates $150 million stemming from an accounting methodology adjustment.
Beginning this quarter, the company is shifting its treatment of warehouse interest on loans held for sale from a revenue offset to a direct expense line item. Management emphasized that while this reclassification inflates both reported revenue and expenses equally, it produces zero impact on net income or cash generation.
The full-year loss before income taxes totaled $(214) million, reflecting the burden of integration activities and expense items connected to the year’s major acquisitions.
The comprehensive 10-K filing, published March 2, detailed these financial results, and the stock’s Monday performance demonstrated investor disappointment with profitability metrics despite the revenue strength.
RKT concluded Monday’s trading at $16.79, representing a 7.7% decrease for the session.
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