Rocket expects adjusted revenue of $2.1 billion to $2.3 billion in the fourth quarter
Key Facts
Rocket set a fourth-quarter 2026 adjusted revenue range of $2.1 billion to $2.3 billion, according to its earnings release dated October 29. The outlook follows a third quarter in which the company reported adjusted revenue of $2.574 billion, up from $1.873 billion in the same period of 2025. Management expects the refinancing market to shrink by about half compared with the third quarter, putting pressure on mortgage activity at year-end. The company said the fourth quarter is "seasonally slow" and noted that refinancing applications were down more than 50% year over year. The adjusted outlook reflects the company’s estimate of revenue after excluding certain items, a different measure from the total net revenue it reported for the third quarter.
Net revenue totaled $3.284 billion in the third quarter, compared with $1.695 billion a year earlier, and the company posted net income of $709 million after a net loss of $124 million in the third quarter of 2025. On an adjusted basis, net income rose to $419 million from $158 million, while adjusted earnings before interest, taxes, depreciation and amortization climbed to $748 million from $349 million. The margin on that metric widened to 29% from 28% in the second quarter, marking a fourth consecutive quarter of improvement. Analysts’ estimates before the results pointed to earnings of 14 cents per share and revenue of $2.59 billion, according to a Reuters report via Investing.com. The company’s shares rose about 3% in after-hours trading following the results.
Management attributed the expected slowdown to seasonality, higher borrowing costs and weaker refinancing demand. The chief financial officer said mortgage rates had reached levels not seen in two decades and refinancing applications were down more than 50% year over year. Mortgage applications in the third quarter also fell 23% from the second-quarter average, while the purchase applications index was down nearly 20% annually, according to the CFO’s remarks on the earnings call. Management forecast that the refinancing market would fall "by about half" in the fourth quarter compared with the third. Fannie Mae’s estimates for the week ended October 23 showed the purchase applications index rising 1.3% week over week while remaining down 19% year over year, and the refinancing applications index falling 61.5% year over year.
Rocket said it expanded its market share in the third quarter despite weaker demand. Its estimated share of the purchase market rose to 6.5% from 6.2% in the second quarter, while its refinancing share increased to 15.5% from 14.3%. Closed mortgage loan volume reached $43.6 billion, and the gross gain-on-sale margin was 2.54%. The chief executive said the company achieved its highest profitability margin in about five years, even as mortgage rates rose to a three-year high. These indicators offer a picture of the company’s performance in a shrinking market: activity volumes face pressure, while its share and margins improved from previous periods.
Rocket’s mortgage servicing portfolio had an unpaid principal balance of $2.0 trillion across 9.1 million loans, according to data as of September 30. On the same date, total liquidity was $11.4 billion, including $2.7 billion in cash and cash equivalents. Across the market, the average U.S. 30-year fixed mortgage rate fell to 7.24% on October 29 from 7.32% the previous week, but remained above the 6.17% recorded a year earlier. The year-over-year comparison underscores the continued high borrowing costs that management cited as a factor weighing on refinancing applications. The company reported results for the quarter ended September 30 on October 29 and scheduled a live call to discuss them that day at 4:30 p.m. Eastern time, with a replay available afterward.
Rocket shares closed at $11.57 on October 28, before the results were announced the following day. After-hours trading provides a separate indicator from the previous closing price: a Reuters report said the stock rose about 3% after the results were published. The fourth-quarter adjusted revenue outlook was issued alongside the third-quarter results, setting a reference range for the coming period as management expects the refinancing market to contract. The guidance applies to adjusted revenue, while the third-quarter results included separate figures for net revenue and adjusted revenue. This follows analysts’ pre-announcement estimate of quarterly revenue of $2.59 billion, which applied to the third quarter rather than the fourth-quarter outlook range.