Q3 2023 Rocket Companies Inc Earnings Call
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 companies incorporated third quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise.
After the Speakers' 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 <unk> head of Investor Relations.
Sharon Please go ahead.
Good afternoon, everyone and thank you for joining us erotic companies' earnings call covering the third quarter of 2023.
With us. This afternoon are rocket company CEO for Krishna, our President and CFO, 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 rocket companies Dot com under Investor Info.
Also available on our website is an investor presentation.
Before I turn things over to her and let me quickly go over our disclaimer.
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 assumptions 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 it's an accessible on our Investor Relations website.
A 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 our 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 Chris not to get US started Korean.
Thanks, Sharon and good afternoon, and welcome everybody to the rocket companies earnings call for the third quarter of 2020.
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 as a business I've admired from afar for a long time.
So in my view, it's among those on a short list of companies that are working on a truly worthy problem to solve.
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 for a successful career.
Homeownership represents stability and financial security at all.
Often serves as the single best way, where people from all walks of life to create intergenerational wealth for their families.
I was also drawn to the huge market potential for more than five trillion dollar home buying total addressable market is massive maybe take just one part of it the mortgage market, which itself is sizable at roughly two trillion dollars and yet independent of rates and inventory remains highly fragmented accord.
The 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.
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.
Documentation alone our proprietary platform, which is responsible for extraction classification and application process 39 million documents over the last 12 months alone.
Now the benefits of digitizing documents and automating discrete tasks as such enormous scale.
Found benefits for our business from enhancing productivity, the faster turn times to hire decisioning accuracy.
If you take just underwriting as an example, an underwriting decision requires the gathering and verification.
<unk> 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 it 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.
I've since starting in the straw it 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 of products and the components of our client experience and where our frontline team members really see the opportunity.
Now on my first day I invited our team members to share their perspectives and questions with me and they responded enthusiastically.
I had the chance to read and respond to hundreds of pieces of feedback and the passion and dedication of our team members is 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.
Everyday 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.
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.
No at rocket this effort is actually already well underway today thousands of our bankers and underwriters utilize rocket logic, which is our proprietary AI powered next generation loan origination system <unk>.
Rocket logic 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 task enhanced productivity and ultimately drive a superior client experience in August of this year, we delivered 20% faster purchase turn times, we reduce 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 environment with thousands of attributes and 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.
<unk>.
And we've already begun expanding our AI capabilities in a single year, we used AI to generate approximately $3 7 billion customer interactions in 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 experienced 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 have 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 achieve 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 were.
To write the next chapter of this Great Company story I look forward to updating you on our progress on our next call and with that I'll turn it over to Brian.
Thank you for Rune and good afternoon, everyone on today's call I'll cover our third quarter operating highlights and financial results as well as our fourth quarter outlook. As Arun mentioned, we are focused on serving our clients through innovation and leveraging our robust data assets and the power of generative AI to deliver seamless personalized experiences.
We posted strong results for the quarter and I'm proud of how well our team members executed to serve our clients in this tough market.
For many in this environment homeownership might feel like it's becoming less and less achievable affordability, which hit a historic low in Q3 is a major concern for those looking to buy a home and inventory levels are not cooperating which is extending the time to buy at rocket. We wanted to give our clients the confidence they need to transact and help them achieve their <unk>.
Jim of homeownership.
Our innovative products, such as bypass and oneplus, which address home affordability and our home equity loan, which helps clients take advantage of equity in their home continue to resonate.
Hi, plus our rocket exclusive collaboration between rocket mortgage and rocket homes helps clients save thousands of dollars in upfront costs when they work with a rocket homes partner real estate agent and obtained financing with rocket mortgage.
This product is a great example of the power of the rocket ecosystem since we launched <unk> plus we've seen our attachment rate defined as clients, who use both rocket mortgage and rocket homes roughly double its worth noting that this combination is something that only rocket can operate at scale through our integrated real estate and mortgage experience.
One plus our 1% down program increases access to homeownership for low to moderate income Americans and further broadens our purchase portfolio. One plus has gained significant traction since its launch in may with closing volume more than tripling from June to September.
In a challenging rate environment, our home equity loan product provides a solution for those who may want to tap into their homes equity without impacting the lower rate on their first lien mortgage.
In addition, we may have the opportunity to consolidate the clients first and second lien if rates were to move lower this product has performed well for us and continues to resonate with homeowners home equity volume has more than doubled in Q3 compared to the beginning of this year.
As you heard from room, we reported strong third quarter results and I'm pleased to share with you three important milestones first we achieved year over year growth in adjusted revenue and exceeded the high end of our guidance range.
Secondly, we delivered profitability across adjusted EBITDA GAAP net income and adjusted net income.
Finally, we continued to gain purchase market share both year over year and quarter over quarter. We've accomplished all of this against the backdrop of a challenging macroeconomic environment.
Having deeper into the numbers, we generated adjusted revenue north of $1 billion in the third quarter above the high end of our guidance range outperformance in the quarter was driven by market share gains as well as increases in both direct to consumer and partner network gain on sale margins.
Net rate lock volume for the quarter was $21 billion roughly consistent with the $22 billion in the second quarter gain on sale margin for the third quarter came in at 276 basis points, which was a nine basis point increase over the second quarter.
Turning to expenses in the third quarter, we continued to execute on our companywide focus on operational efficiencies Q3 expenses were roughly $60 million lower than the prior quarter, excluding the $51 million one time charge on our last earnings call, we committed to an additional cost savings on an annualized.
Basis in the range of $150 million to $200 million I'm.
Pleased to share that we expect to come in at the top end of that range with approximately $200 million of annualized savings.
This achievement is the result of a concerted effort that has spanned the winding down of underperforming businesses to a rigorous re prioritization of company initiatives to the implementation of a career transition program.
These savings are expected to fully take effect in the fourth quarter.
In the third quarter, we generated $73 million of adjusted EBITDA. Thanks in large part to the continued cost reductions we've implemented over the last 18 months, coupled with the outperformance in adjusted revenue.
We reported adjusted net income of $7 million positive adjusted diluted EPS and four of GAAP diluted EPS, turning to our balance sheet rockets financial position continues to be a strategic strength. We consider this to be a major competitive advantage in today's market as it provides us with flexibility in <unk>.
Optionality that most of our competitors simply do not have we.
We ended the third quarter with $3 8 billion of available cash and $6 7 billion of mortgage servicing rights together. These assets represent a total of approximately $10 $4 billion of value on our balance sheet. Our $3 8 billion of available cash consists of $957 million of <unk>.
Cash on the balance sheet and an additional $2 $8 billion of corporate cash used to self fund loan originations.
Liquidity stood at approximately $8 $7 billion as of September 30th including available cash plus undrawn lines of credit and our Undrawn MSR lines.
As of September 30th our mortgage servicing portfolio included more than $2 4 million loans serviced with approximately $506 billion in unpaid principal balance in the third quarter, we acquired $103 million and mortgage servicing rights, adding $6 $2 billion of unpaid.
<unk> balance to our servicing portfolio, our net client retention rate in the third quarter was 97%.
Which is multiples higher than the industry average retention rate serves as a key metric engaging client satisfaction and is one of the primary indicators of client lifetime value.
We also drive considerable recurring revenue from mortgage servicing during the third quarter, we generated $344 million of cash revenue from our servicing book, which represents approximately $1 $4 billion on an annualized basis.
Turning to our outlook for the fourth quarter, we expect industry conditions to remain challenging through the balance of the year, we anticipate adjusted revenue to be in the range of $650 million to $800 million.
The guidance takes into consideration difficult market conditions marked by record low affordability and inventory levels further magnifying the traditional low seasonality in the fourth quarter.
The industry typically sees decreased purchase activity and volume in the fourth quarter due to the winter months and fewer working days during the holiday season. The lower volume also puts pressure on gain on sale margins in the fourth quarter, excluding the $51 million one time charge in the third quarter, we expect fourth quarter expenses to be roughly 50.
Dollars to $100 million lower than Q3 expenses.
As always our forward looking guidance is based on our current outlook and visibility looking ahead, we believe our culture of client obsession wealth of assets and use of generative AI will help us make significant strides in operational efficiency and innovation as Vern highlighted we see tremendous opportunity ahead to disrupt the industry.
And completely re imagine the home buying experience I look forward to sharing more in the coming quarters. We're just getting started with that we're ready to turn it back over to the operator for questions.
Thank you.
At this time I would like to remind everyone that in order to ask a question press star and the number one on your telephone keypad and we will pause just a moment to compile the Q&A roster.
Yeah.
And our first question comes from the line of Kevin Barker with Piper Sandler Kevin. Please go ahead.
Good afternoon, and thanks for taking my questions.
Wanted to maybe touch base, a year with with Rune, maybe get his first impressions of the company given he's been there for you've been there for a few weeks.
We got to meet several of the folks in different departments, maybe just give us a view of what you've seen and what the opportunities you see within rocket today.
Kevin. Thank you for your question Great to have you here.
It's been an amazing first couple of weeks here.
The chance to really go deep into our business and immersed myself.
I've read and responded to hundreds of team members.
And I've spent countless hours just going deep into the business into the product.
Talking to our clients.
And just understanding every aspect of all that is that we do.
I can just tell you that I'm very impressed with her leadership our team members our culture.
And it's early days I think there are some opportunities as well.
How we can increase our focus or prioritization.
How big we can bet big on technology as a key part of our future strategy.
And we're in the midst of writing that next chapter with the leadership team. So I look forward to sharing more with you.
But it's been Super exciting and we're just getting started.
And then maybe.
Follow up regarding the servicing transaction maybe for Brian.
Could you just give us a little more detail on what the gross yield was on the MSR portfolio you purchased maybe what the weighted average coupon.
I believe you mentioned that it was higher coupons than your existing portfolio now makes it opportunistic for refis.
Yeah, Yeah. Thanks, Kevin happy to take that question I mean first just to take a step back.
Servicing continues to be a strategic asset for us. It's a nice hedge of course to the origination business and we definitely like the returns and the cash flows right now it's proving to have very valuable rois, but as you know and we've talked about before we really look at it through this LTV lens.
And the LTV is really based on these industry, leading recapture so if you think about what we're trying to accomplish we're trying to acquire portfolios. We're trying to acquire clients that have a high LTV that we believe we have an opportunity to recapture we've mentioned that we've sold some servicing that we believe the LTV is low on this as an example.
Of buying some servicing that has a higher LTV to answer your question on the note rate it was north of 6%, but we're creating servicing every single day through our organic originations and those are at prevailing rates higher note rates. We're also looking to acquire servicing at higher note rates and slowly, but surely you end up taking up that.
Average note rate and then if rates if and when rates do decrease you have a really nice refinance opportunity.
Just a quick follow up on that just given.
You're 97% client retention rate.
And a market that it seems like it's a buyer's market out there for Msr's.
Why not become much more aggressive in buying higher coupon.
Msr's in order to increase the pool of available Refis for Ya.
Yes, that's exactly what we're trying to accomplish we are as we've said they are very active in this space, we get a lot of looks.
This is a good example of a competitive process that we've won.
It's something it's a asset that we're looking to grow there is no question about it because of what you said the lifetime value on those is really good.
Okay. Thank you Brian Thank you Brian.
Yes.
Okay. Thank you and it looks like our next.
Next question will come from the line of Ryan Nash with Goldman Sachs. Ryan go ahead.
Hey, good evening everyone.
Yeah.
Rune.
The term AI was turnaround about several times in the prepared remarks that you both yourself and Brian talking about it.
Maybe just dig in a little bit deeper in terms of what you see as the biggest opportunities for the company.
Can you just generative AI and what do you think this can mean for the overall efficiency of the mortgage origination process and the company overall.
Yes. Thank you for the question Ryan Great to have you.
I would just start by saying that I think that.
Fintech in general and in particular, the homeownership market.
Its very ripe for disruption with artificial intelligence.
And there are a couple of things that make rocket in particular unique it's whether it's the vast amount of data that we have for personalization.
$50 million call logs, the thousands of attributes of <unk>.
Data that we have on our clients.
I think what's what's compelling is that we have an opportunity to really transform every aspect of the home buying process.
So lead generation allocation underwriting closing servicing.
And I think really almost every aspect of the home buying experience can should and will be transformed with AI.
We've made some progress in this space and I'm really excited about the foundation.
But I think we're just scratching the surface.
We've made some investments here and capabilities like rocket logic and our data platform.
Think about the role of knowledge engineering machine learning natural language processing automation workflow. This is a perfect fit problem for artificial intelligence to solve and so I'm really excited about the foundation, but we're describing the surface.
Got it.
That's helpful and then.
Brian maybe a question for you. So we had three straight quarters of.
Both top and adjusted EBITDA improvement it seems like in the fourth quarter, you're going to take a little bit of a step back at least on at least on the topline, but some of that well.
Come back.
The high end of the 50 or $100 million of cost cuts.
Can you, maybe just give us a little bit more color on how much of the volume impact is seasonal declines how much should we expect to see maybe just expand on the comments around increased margin pressure in the fourth quarter or is that just because of greater competition for lower overall volumes or is there something else that youre seeing there. Thanks.
Yeah. Thanks, Ryan So when I think about the fourth quarter Guide I don't think it should come as a surprise to your point the fourth quarter is typically a seasonally low quarter as we think about the home buying season. It cools off you have the additional holidays around Thanksgiving Christmas and new year's and consumers are we know theyre relatively inactive dirt.
Those times and because the volumes are challenged you definitely get pressure on gain on sale margins firms will use price as a lever and everything that I. Just described is just describing a normal fourth quarter in a normal mortgage market and this market is of course more challenged so you have those same challenges.
Coupled with the lowest inventory on record in September at least according to <unk> you have affordability challenges that we haven't seen since the early 90. So all of that goes into the guide. There is no question, but just I think a couple of important takeaways. We believe even at this revenue guide level, we're taking share in the fourth quarter and it's still.
Our guide up from the fourth quarter of last year, So, it's still topline improvement year over year.
Okay.
Thanks for the color.
Thank you.
And it looks like our next question comes from the line of Derek <unk> with Jefferies go ahead.
Hi, Good afternoon could you share details about your outlook for 2024 originations. The MBA has projected a market close to two trillion.
Which would be about 19% year on year growth, but.
Current market run rate is about $1 seven so any details on how we're thinking about volumes in mortgage rates for 24 would be helpful.
And then also kind of at what mortgage rate, we would start to see a meaningful uptick in refinance volume.
Thank you for the question Derik, great to have you.
I would just start by saying that from a rocket perspective, I like our position.
The market is going to be the market meaning.
Meaning that rates will go up and down inventory will go up and down and.
There is sort of a cyclic nature to the business.
But we believe our strategy is incredibly durable, meaning that there's a huge fragmented market.
And we are very underpenetrated.
And what is a headwind for the industry. We believe is a tailwind for rocket in particular.
It is a dynamic where it may be tougher for small players to compete but we are incredibly well capitalized we have liquidity.
And we have a huge opportunity to accelerated growth and take share, especially when you think about the opportunity to create a more disruptive experience leveraging technology.
I'll ask Brian if theres anything that he would add to that but we're very excited about our position.
Given the size of the market the level of under penetration sort of independent of rates and inventory.
Yes, thanks for and I think that was well said the only other thing I'd add Derek can you think about where 2023. This year, we'll end up I know I think you said one seven I think it's less than that we've looked at more recent forecast from banks and we're probably more like 1314. So then take your point about the NBA who was the most.
Recent to re forecast 2024, two trillion, that's north of a 50% increase a two trillion dollar market coming up this market could actually be very healthy.
And very productive.
That said, that's not necessarily what we're planning for we're hoping that's true, but we're planning for a market that is more challenged than exactly back to Brian's point with our balance sheet, our liquidity and our capital profile you could look at.
Rates higher for longer scenario as a tailwind for rocket is more capacity keeps coming out of the industry.
Got it.
Helpful color, there and one more quick one.
As the quarter over quarter increase in other income primarily driven by eschar income or is there anything else to be aware of in that number.
Yes, you nailed it a lot of it's coming from just increased escrow earnings as rates continue to increase.
Got it. Thank you that's all for me.
Thanks Derek.
And our next question comes from James Faucette with Morgan Stanley James Go ahead.
Yeah, Hi, this is Jeff adelson on for James.
Good afternoon.
I guess just last quarter, Brian you talked about.
They are pre approval rates, increasing I think higher than seasonality of 20%, which was a good sign for this quarter is there anything youre seeing today on that front that might help you inform you about the next quarter into next year.
Yes.
Yes. Thanks for the question I mean, I think you what you are alluding to is the beat this quarter. We beat the top end of our guidance that largely came from share gains. It definitely came from share gains and then a little bit of help from gain on sale margins.
Good pre approval numbers, we're seeing that trend continue through the third quarter, but of course, we are starting to see the seasonality of the fourth quarter take place, but again I think it's important to just come back to something we said earlier when we look at this fourth quarter Guide. We still believe this guide is taking share in the fourth quarter. We know people are.
To buy and sell homes, we're still seeing very high demand for homes.
And consumers interested in buying homes, we just need cooperation from inventory to get them in homes.
Got it that's helpful and.
Just given the difficult environment out there the rate environment has turned more favorable in recent months.
Would you anticipate doing more expense reductions next year.
If things kind of stay where they are.
Or do you feel comfortable with what you've done so far and as part of that if we do stay in this kind of higher for longer environment. I know you talked about some more excess capacity coming out of the system, but.
What do you think it would take for you to get more consistent profitability or what are you looking to reach that if the environment doesn't turn.
Thank you for the question I'll start and then maybe Brian you can add any perspectives.
I'll just start by saying that our primary focus is on growth you'll have a five trillion dollars home buying Tam.
A fragmented market the mortgage market is one five to two trillion dollars.
And we have this crazy opportunity to be very disruptive with AI.
We're always looking for efficiency, we think we're in a good place.
But as Brian shared earlier, I mean, we're well capitalized.
Our perspective is we're in a position to actually invest.
And we're looking for ways to increase our focus or prioritization.
But we are being very opportunistic given where we are in the market yes.
Yes, that's right and the only other thing I would add just going back to those prepared remarks, we are happy to report we talked about.
Expense reduction plan of $150 million to $200 million. We're pleased to report we are at the high end of that.
And we have this pursuit of operational efficiency that Bruce has alluded to and Thats something you start and stop that's something that's built into your DNA.
Great. Thanks for taking my question.
Thanks James.
Again folks if you would like to ask a question. It is star one on your telephone keypad.
And our next question comes from Erin <unk> with Citi. Eric Go ahead.
Thanks, I was wondering if you could talk a little bit about.
Progress, making pickup in market share on the purchase side and whether or not the bi plus program that you have.
Put in place earlier this year is making a notable difference.
Thank you for the question Erinn I'll start and then Brian can add any any perspective.
I'll just start by saying that our purchase products, just continue to be relevant and resonate with our clients.
A few examples we have our <unk> program and since the launch we've seen the attachment rate double.
Our one plus program, which is a 1% down program, we've seen the units triple between June and September.
So have our home equity loan program, we've seen loan units and net rate lock volume double just in the Q3 alone and so I think the goal for US is to ensure that our programs that we're putting out are innovative.
More importantly that they are relevant and that they resonate with our clients and so we're excited to see that progress and we're also excited to continue to innovate and Brian anything that you would add yes, I think thats great I think the only thing I would add we've talked about in terms of how we measure share we of course use the industry forecast, but a really good indication as securitization Dave.
When we look at that and Thats of course available to everyone. It shows us taking purchase share quarter over quarter and year over year. We also look at a lot of internal data to get more real time results like optimal blue and Corelogic, but the nice thing is no matter. How you do that math all three of them pointed in the same direction that we are continuing to take share and we are seeing.
Capacity continue to come out of the system. So it's no surprise.
Thanks, So on that last point from a capacity standpoint.
I guess, where do you think we are in that in that process. Do you think theres still a lot of capacity that continues to need to come out of the market.
Look I think we talked a bit about what 24 could look like at least from how the industry forecasters are looking at it and if rates are higher for longer that bodes well for us from capacity continuing to come out I think we'd all like it to come out faster.
But if you think about all of these mortgage companies that went public and raised capital.
At that time, it put them in a different position and time will tell in terms of how that shakes out, but again, we think about us we think about our balance sheet our liquidity profile.
To keep investing through these cycles, that's the stuff that gets us excited.
Got it thank you.
Thanks Darren.
And our final question today will come from Don <unk> with Wells Fargo. Dan go ahead.
Oh, Yes, I was wondering if you could just talk a little bit about the acquisition strategy. If you see any fintech opportunities to kind of feed the funnel and also just an update on rocket money and how you felt like that traction is moving.
Yes, I'll take this one thank you Don for your question I think the first thing I would just point to again as Bryan alluded to is one of the great things about rocket is we have a very robust capitalization structure.
We have what we call a fortress balance sheet.
And high levels of liquidity and I think that gives us a lot of flexibility and it affords us the chance to be opportunistic, especially in this market, where you see things like valuations being down so what I would share is just we are actively in the process of writing the next chapter of our strategy with our leadership team and we are.
Going to be pursuing ways to accelerate that strategy, whether it's organic or inorganic and.
So.
I look forward to sharing more as we write the next chapter.
And so more to come we are going to have an investor day in the coming quarters and so we will have an opportunity to go very deep on our strategy with all of our all of our folks in the Investor community.
And also just say with rocket money, we're pleased with the progress that we're making.
Look forward to sharing more with you.
In the quarters ahead.
Got it thanks.
Thank you Dan and thanks to all who ask questions today I will now turn the call back over to Verona Krishna for closing remarks, Brian over to you.
Alright, Thank you everybody for joining us today, we appreciate you and we look forward to connecting again next quarter.
Thanks, Brian Ladies and gentlemen that does conclude today's conference call. You may now disconnect have a great day everyone.
Okay.
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Yeah.
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