RKT Up on Q4 Earnings Beat as Revenues Rise, Announces Compass Deal

Shares of Rocket Companies, Inc. RKT gained 8.1% in the after-market hours, following the release of its fourth-quarter and 2025 results. Adjusted earnings per share of 11 cents surpassed the Zacks Consensus Estimate by a penny. The bottom line grew significantly from 4 cents per share in the prior-year quarter.

Results in the reported quarter were aided by significantly higher revenues. The origination activity remained solid. However, an increase in expenses was the undermining factor.

Net income (GAAP basis) attributable to the company was $68 million, up from $34 million in the prior-year quarter.

For 2025, adjusted earnings per share were 28 cents, which surpassed the Zacks Consensus Estimate of 25 cents. The bottom line grew 21.7% from the previous year. Net loss attributable to the company (GAAP basis) was $68 million against net income of $29 million in 2024.

Revenues Improve, Expenses Rise

Total adjusted revenues in the quarter were $2.44 billion, up significantly year over year. The top line surpassed the Zacks Consensus Estimate of $2.26 billion. Total GAAP net revenues were $2.69 billion, up 52.2% year over year.

Full-year adjusted revenues of $6.86 billion increased 39.9% year over year. The top line surpassed the Zacks Consensus Estimate of $6.51 billion.

Net gain on sale of loans in the reported quarter was $1.19 billion, up 67.7% year over year. Net loan servicing income declined 5.9% to $700 million. Other income increased significantly from the prior-year quarter to $771 million.

Total expenses were $2.52 billion, up significantly from $1.09 billion in the prior-year quarter. The rise was due to an increase in all cost components.

The company generated $41.6 billion in total net rate lock volume and $47.3 billion in total closed mortgage loan origination volumes in the fourth quarter. Total gain on sale margin was 2.82%.

Balance Sheet Position Solid

As of Dec. 31, 2025, total liquidity was $10.1 billion. The company had $2.7 billion of cash and cash equivalents and $0.1 billion of corporate cash used to self-fund loan originations.

The company had access to $2.3 billion of undrawn lines of credit and $5 billion of undrawn mortgage servicing rights lines of credit from financing facilities as of Dec. 31, 2025.

Quarterly Segment Performance Robust

Direct to Consumer : Adjusted revenues grew 96.3% year over year to $1.78 billion. Sold loan volumes increased 56.7% year over year to $25.9 billion.

The contribution margin rose significantly from the prior-year quarter to $850 million.

Partner Network : Adjusted revenues surged 77% from the prior-year quarter to $239 million. Sold loan volumes increased 53.1% to $20.86 billion.

The contribution margin rose 94.8% from the prior-year quarter to $150 million.

RKT Announces Strategic Alliance With Compass

Concurrent with the earnings release, Rocket Companies announced a three-year strategic alliance with Compass International Holdings to expand housing inventory and create a more streamlined and affordable home-buying and selling experience for American families.

Per the agreement, Redfin will become a home search partner for Compass, giving Redfin users access to Compass's Private Exclusive and Coming Soon listings. The alliance will also expand Redfin and Rocket Mortgage's distribution footprint with Compass's approximately 340,000 agents.

Rocket Mortgage will become Compass's digital mortgage partner, delivering value to home buyers through its preferred pricing bundle, which will include offers.

Our View

Strategic acquisitions (including Redfin and Mr. Cooper) are expected to continue to drive RKT’s revenues and aid margin expansion. Solid liquidity and easing rates will likely support the company’s financials. However, elevated expenses, Redfin and Mr. Cooper integration risks, and housing and regulatory headwinds remain major concerns.

Rocket Companies, Inc. Price, Consensus and EPS Surprise

Rocket Companies, Inc. price-consensus-eps-surprise-chart | Rocket Companies, Inc. Quote

Currently, RKT carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Companies

Citizens Financial CFG reported fourth-quarter 2025 earnings per share of $1.13, which surpassed the Zacks Consensus Estimate of $1.11 per share. The metric rose 32.9% from the year-ago quarter.

CFG’s results benefited from a rise in non-interest income and net interest income (NII). The increase in loan and deposit balances was also encouraging. However, a rise in expenses was a major headwind for CFG.

Wells Fargo & Company WFC reported fourth-quarter 2025 adjusted earnings per share of $1.76, which surpassed the Zacks Consensus Estimate of $1.66. In the prior-year quarter, the company reported earnings per share of $1.42.

WFC’s results benefited from an improvement in NII, higher non-interest income and lower provisions. Higher loan balances and improved deposits were other positives.

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This article originally published on Zacks Investment Research (zacks.com).

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