That's about it. We're going to hang out in New York sometime.
Yeah. Ready to go?
Yep. Do you press on there?
Are these on?
Are we on already?
All right. Thanks, everyone, for coming. I wanted to introduce myself first. I'm Chris Dyke from JPMorgan. Thanks for coming. More importantly, I wanted to introduce Varun Krishna from Rocket Companies. Varun's been at Rocket for a little less than two years.
Yep.
He's been incredibly busy. Close to $500 million of investment in tech and AI. Two acquisitions announced in the last couple of months. A rebranding of the company. It's been an incredible two years. We could talk about all of that. Maybe first, to start, let's talk a little bit about your background, where you came from. You're a tech guy.
Yep.
Started at Intuit and Microsoft and PayPal. Talk to us a little bit about your background, your leadership style, what you're bringing to Rocket.
Yeah. I mean, I am still very much a student. I think I have had the privilege of working in different industries for companies large and small. I did my undergrad in computer engineering, started out at Microsoft, spent about 10 years there. Was a product guy, really, because I didn't really cut it as an engineer. I just was never going to be the best engineer. I went to, like, the next most adjacent thing. Left Microsoft, went to an early-stage startup with big delusions of grandeur and thinking that I had it all figured out. I very quickly learned that I had to relearn everything. Startup experience was very valuable. It was a company called Betterworks Inc. From there, I was at Groupon.
I led the consumer product team there, early-stage Groupon, from the period where daily deals took off to the hyper-growth and then all the things that happened after. I spent a few years at PayPal running the consumer product organization. Most recently at Intuit, where I just kind of grew up in the TurboTax and consumer world and ended up running the consumer division for the company. I think along the way, I have just been lucky to work with a lot of really awesome leaders. I think my leadership style is probably one that has been adopted by a philosophy of studying and learning and taking what you like from people that you learn from, and then also leaving the things that you do not like and building a leadership style that really is all packaged learning from big companies and small companies.
Very much a student, very much believe in people. You know, I would say, you know, I have a healthy appetite for risk, but I'm also very focused on products and services that can better the financial world. That's what led me to Rocket. I'm fortunate to have inherited, I think, an organization and a company that has been, in my opinion, a sleeping giant for a long time. That's exciting. In many ways, I think our mission is sort of the true frontier of fintech. It is the ultimate reason that fintech products and apps exist, is for homeownership. To be able to contribute to that, to be able to work with an amazing team that wants to get after it and to be able to execute on big, bold swings, you know, quickly, it's just been the opportunity of a lifetime.
Excellent. Last post was Intuit. What parallels do you see between the tax prep industry, the housing industry, and what do you bring from there?
Yeah. I think there's a lot that is actually very analogous. You know, the concept between these products is they're very workflow-centric. I mean, you have a person that wants to get from point A to point B. In order to get there, they have a physical characteristic or underwriting. They have data. They have commerce. Then there's an algorithm that sort of qualifies or underwrites them for an outcome. Like, doing a tax return when you dissect it that way is not that different than the process of buying a home. It's just one is more complicated. One has a stronger people element, but it is a deterministic exchange of data through a workflow process. There's a lot that I think translates.
I also think there's a huge opportunity there for us to really leverage better automation, better personalization to make things easier, faster, and cheaper. There's a lot that we experimented with around TurboTax to bring it into the service-driven world with sort of an assisted layer that I think translates a lot to the transformation that's happening in the mortgage industry. I think there's a lot just in terms of understanding how conversion funnels work and how engagement funnels work and what the approach is to optimize those. Ultimately, you know, these businesses are also similar. They're highly regulated. They have a high compliance risk component. There are just sort of elements that involve being able to do business in 50 states and being able to offer products at scale and being able to meet regulatory standards, having the cybersecurity requirements.
It takes a long time to build a durable advantage. That's something I appreciated about Rocket is that, you know, we've been around for 40 years. That's how you create sort of a mortgage giant, is that you invest and you invest and you invest and you take lots and lots of parts of the engine and you build that together.
Excellent. That's really helpful. You've spoken a lot about culture. Rocket has a tremendous culture. You have great leaders across the organization. How do you foster leadership and independence and culture at Rocket and continue to help the company grow?
Yeah. I think, I mean, I tend to feel that a very balanced approach is the best approach, which means that you have to elevate and build on the things that are working really well, but you can't be afraid to evolve. In fact, sometimes that evolution looks more like a revolution. From a leadership perspective, the first thing I think is just realizing that the culture of Rocket is what makes it strong. I mean, it's something that has existed long before I got here. The opportunity to kind of just continue to strengthen that culture was already there. That exists with the leadership of the team.
What you do by bringing in a handful of new leaders, you know, and so I brought in approximately five to six new senior leaders to the organization, and then we elevated five to six leaders within the Rocket organization, is that you create a really nice balanced leadership team that brings a combination of fresh thinking, but fresh thinking that builds on the foundation that already exists. The key to that, to be honest, is really knowing people, right, and caring a lot about the psychological fit and caring a lot about the cultural alignment. You know, mortgage is a dogfight some days. You're in the trenches a lot. I want to know that I have leaders that can handle that pressure. I want to know that I can call and text them. I want to know that they'll respond with a sense of urgency.
I want to know that they will, you know, be in the trenches with each other, that they will love each other, respect each other, work together. You know, there is no substitute for experience when it comes to thinking about how to build a leadership team. I think it comes with judgment. It comes with trying things. It comes with failing and learning how different companies operate. I have just, I have learned from that, and I wanted to create a balanced approach. We feel great about that. Our, you know, 20 months in, we have made a lot of changes. Our organizational engagement is super high. Folks see where we are going. They believe in the mission. They want to win together. You know, we do a lot of regular, you know, obviously outlet surveys and pulse surveys to gauge the engagement of the organization.
The biggest point increases are in the things that are systemic to the future growth of a healthy company. It's that I want to work here. You know, I'm a promoter of this company to other people and that I see myself as a big part of its future. All of those things are, to me, just a sign that Rocket is very healthy and sort of ready for this next chapter.
When you first started, one of the quotes you had was you were focused on both execution and innovation. Where are you on that journey and that spectrum, and what does the future look like for Rocket?
Yeah. I think we're, I would say we're not even close to started. I would say we're at like the babiest of baby steps. But I'm so proud of the progress that we've made. I mean, just if I were to look at just this March compared to the same time two years ago, we're helping serve 21% more clients. Our turn times are down over, are 14% better. And if you look at our production team members, they're serving an average of 50% more clients per team member. And that's like, I mean, that's just looking from where we are. I think the future is like significantly more accelerating toward achieving, I would say, like metric order of magnitude improvements in efficiency and personalization and just experience.
I think that, you know, a lot of this is today, the concept of AI is very focused on better, faster, cheaper. I think tomorrow there will be more of an evolution that's harder to describe where you're starting to see this with agentic stuff, but like where entire problems are thought of completely differently. It's not like, how do I optimize this problem? It's like, how do you approach it in a way that the problem itself doesn't even exist?
You know, and I think that that's what's really exciting is, you know, on the innovation spectrum in housing, when you think about the entire process of, you know, and I'm sure we'll talk about M&A in a bit, but home search to working with a realtor, to title, to financing, to closing, to servicing, to personal finance, it's, there are so many places for that kind of transformation to happen. I feel that the pace of innovation will accelerate, which is why I think we're in the earliest of stages.
That's a great transition into what's next. What's the future of Rocket? You know, Rocket has been described as both a mortgage company, a technology company. How do you balance those two identities? Where do you focus your time? And then we can get into maybe one of the biggest topics that you've talked about, which is AI.
Yeah. I think I get this question a lot, which is like, are you a mortgage company or are you a technology company? I don't know, I'm just, I've got a weird mind, but I like to dissect questions a little bit. It's like, the question to me is interesting because like when you think about a company, you think about a why, like what's your purpose? Then you think about a what, which is like, what are you trying to achieve in service to that purpose? You think about a how, which is like your method. I would argue that all companies are technology companies or at least want to be. Technology to me is sort of at the how end of the spectrum, right? The mortgage is more of a what, right?
The mortgage is a solution to that problem, but it's only one part of the solution. The why is more around, I think, a bigger concept like homeownership, right? Like safe and sustainable homeownership for every human being on the planet. We are a homeownership company is the way I would answer the question. Not just mortgage, but we want to deliver and facilitate the entirety of the homeownership experience, not just for the client, but for the realtor, the mortgage broker, and all of the important stakeholders in that ecosystem. We have always been a technology company, you know. That again existed long before I got here, but you know, we were the first to put the mortgage on the internet. We were the first to make them digital. We were the first to make them mobile.
You know, thinking about technology, how you harness technology and, you know, the breakthroughs you can achieve, I think that that is really more of our how. You know, we are a homeownership company. That is how I would describe us.
Excellent. There's been a lot of discussion around AI. You've invested quite a lot of capital into technology and AI, $500 million over the last couple of years. How, where are you on that AI journey? How far do you think it goes? What's next as you think about the integration of AI into the homeownership process?
Yeah. I think, again, it's very difficult to place a timeline on a journey that you really feel like you're just at the precipice of. But, you know, I think we have been investing. I think the good news is, you know, over the past several years, we've put about $500,000,000 of investment in building data infrastructure, building models, understanding, you know, just basically things like intent, being able to have good data, clean data, measurable data, you know, building the metrics infrastructure. And so a lot of that foundational piping, I think, is extremely beneficial to where we are on the journey. I think the thing that's interesting about this is that it's not, you know, the thing that I would say is when you think about the next paradigm of technology, it gets away from concepts like apps.
You know, that's what we think is going to happen with AI is that, you know, there are certain players and, you know, visions in the industry of concepts like an app becoming the epicenter of everything or a super app, if you will. The issue that I have with that is that I don't think that that paradigm is the AI paradigm. I think the AI paradigm is more driven by services. It's more driven by notifications. It's more implicit in nature. It's more workflow-centric in nature. Today, people use apps because they want to engage with things. For financial products and services or workflow products and services, engagement is the antithesis of the experience that you want to create. Nobody wants to do their taxes, right? It is something that you have to do. It is a compliance problem.
What you want is to be in a home, right? Everything else you have to do is the process by which you do that. You know, our view of AI is a different kind of an experience. Our end state is a digital experience, a service experience, a notification and workflow experience, a money movement experience, you know, safe and secure data exchange. You know, how does that create something that is magical, right? An app is just one small part of that. To me, it is a part of an integrated whole. I do think we're kind of at the early stages. I mean, the good news is we're just seeing tremendous benefits from applications.
I could go on about use cases, but, you know, we have, you know, low-code, no-code applications that our team members are building every single day. Some of these apps are just going viral. To see that happen, you really start to become a believer in what the technology can do.
That's great. It would be, I think, helpful to unpack some of the specific apps that you have within Rocket, you know, the Rocket Super Stack, as you call it, Rocket Logic, Navigator. How do you measure the effectiveness of these apps or AI programs? What are the right KPIs? Like how should investors think about that?
Yeah. I mean, I think at the end of the day, you know, the product is organized around a funnel. To answer the second part of the question first, and then I'll give an example, you know, there are core metrics like how are you doing on traffic? How are you doing on mortgage attack? Are you driving conversion? What are your turn times? What are the efficiencies of how you're getting underwriting done faster? What do things like recapture look like? Contact reduction. To me, those six or seven metrics in some ways are my executive dashboard for how I look at the health and success of the business. That's how I would look at it.
Obviously, there are things like, are you growing share profitably, which obviously are part of our North Star metrics as my partner in crime, my CFO over there likes to remind me and make sure that we stay focused on. That is kind of the metric side of it. You know, I think in terms of the progress, I'll just give you another example. I saw an app last week that is going viral inside of Rocket. It is an app that a banker wrote that he calls a banker report card. We do about 100,000 calls a day, and each of those calls gets scored. That is a manual review process that requires a person. We have a product called Navigator that is our low-code, no-code app development environment.
We have a product called Synopsys, which essentially is a semantic repository of every single call that we do, which is 65 million calls. What you can do is you can use Navigator to build an app using the Synopsys data. He built an app that basically creates a banker report card and it sends a real-time coaching feedback to the banker that says, and you can ask it all kinds of things. Did I get the objection often enough? Show me, show me for example, like what happened if a female banker is paired up with a male, you know, client in this particular region. Help me understand, you know, whether call time had an effect or analyze this call and tell me the four things that you would do differently or where the conversion dropped.
You get this report card and it's basically shipped to every banker in real time. Our coaching, the amount of time we spend in coaching, we've force multiplied our coaching by 10x. When you have a banker force of 3,000 bankers, right, and you think about the amount of time that is spent on coaching to improve conversion, that sort of entire model has been turned over on its head. It just, that's just one example of a product that, by the way, was written without an engineer, which is, I think, the true magic about it is like, you know, engineering to me has always felt like modern-day magic. AI to me is sort of this evolution where anyone can manufacture anything with the right kind of prompt engineering. Very exciting. I think the best is yet to come.
Excellent. Let's change gears just a little bit. What does it take to lead in the homeownership industry today? How is AI helping? We'll get into M&A next, but how have the acquisitions or announced acquisitions of Redfin and Mr. Cooper aided in leading in homeownership? What does it take to be the leader?
You know, I think it's difficult to say with precision that anyone has figured it out. I think the main thing is I would say that largely speaking, everyone probably has some kind of a fuzzy vision of the end state that's pretty similar. I think the nuance of it is what is your starting point? I think what it takes is being able to figure out how to leverage your starting point to the fullest advantage and to make that a durable advantage on top of which you get to kind of build the rest of the vision. You know, from our perspective, you know, we think about the concept of an integrated homeownership platform.
At a high level, that means that, you know, the entire experience from searching a home, working with a realtor, going through title, financing, servicing, closing, and all of the fee structures and the interactions associated with it are as simple as frictionless at the best value possible. You know, I think what it takes is having a good starting point and then just being relentlessly focused on improving the process bit by bit, inch by inch. I also think it requires a bit of activation energy. I think it is very difficult to build, you know, a large mortgage origination company. Just the activation energy is enormous. You have to create capital markets infrastructure. You have to have relationships with GSEs. You have to have compliance and requirements across. It is a large task.
It is not something that I think is easy to do for a smaller or earlier stage company. I think it's about the right starting point. It's about being very focused on process optimization and then betting big on AI and what you think that will ultimately allow you to build.
Excellent. Maybe let's move into M&A. You've been very busy, especially over the last number of months, announcements of Rocket and Redfin. How are you thinking about the integration of those businesses into Rocket? What do they bring to the homeownership experience and what do you think the end state is from those acquisitions alone?
Yeah. Obviously, we've spent quite a bit of time thinking about this. And, you know, I'd start by sharing that just a lot of our strategy, because I think this is really just, I would like to just take a chance to articulate our strategy and how they fit in. But this started a little bit with a realization of just what Rocket had already done. I mean, we'd experimented with the top of funnel space. We'd experimented with servicing and recapture. And there were a lot of learnings from the experiments that I think led to some aha moments. The starting point for us is always the fact that homeownership today sucks. It is an awful, awful experience. It's expensive. It's complicated. It's manual. It's inefficient. And someone has got to build a better system. So that was one aha moment.
The second aha moment is that the entire industry is super adversarial. Like there's not a lot of ecosystem shared relationships. I mean, you just sort of move, and the consumer sort of moves from one part of the industry to the other and just kind of bounces around, banging their head against the wall, you know, more than once. That's like not okay because homeownership is like, it's like the American dream. It's the one thing that's worth fighting for. It's the one thing that, you know, consumers want and need. That was our starting point. There's a few aha moments, I think. I would just very quickly say the first one is that the home search experience, the origination experience, and the servicing experience are not as separate as people think.
There are three different industries and three different funnels, but a consumer flows through that as one funnel. If you can connect that funnel, you can build a super funnel. That was a big, big realization for us through experimentation. The second thing was that this will make Rocket a lot stronger. It will make Rocket stronger for three reasons. It strengthens the business model. It makes it balanced because you can make hay when the sun is shining or when it's raining because of the fact that you have a servicing business and you have a search business that both allow you to do recapture and purchase. That is a great thing for any kind of rate environment. Obviously, as you see rate movement downward, you do what Rocket does best, right? Creating that flywheel strengthens Rocket.
We talked about data and AI, but in a world where you believe that more proprietary data, more signals on consumer intent lets you build a better product, better models, this makes a lot of sense. The last thing, quite simply, as I said earlier, is just you can tell that I'm passionate about it is you just get to build a killer client experience. That fundamentally excites me. You know, I can go into more depth, but just at a high level, I mean, if you take Redfin and Rocket and you sort of put them together, that's 62 million monthly active users that come to your front doors, right? That's over 10,000 agents strong, you know, that you get to interact with.
When you connect that to the Rocket Mortgage funnel, you know, that connects to over 3,000 of the industry's best loan officers, over 10,000 wholesale brokers. You connect that to the servicing business in totality, that's, you know, one in six mortgages, that's 10 million clients that you're going to be engaging with every single month. If we get that right, you know, the number one real estate brokerage website, the number one originator, the number one servicer, you become a homeownership platform, right? Where you are able to build something that's much more integrated, much more seamless. The best part is everybody wins, right? Like this is an ecosystem where we want realtors to win. We want brokers to win. We want the client to win.
Our incentive is extremely aligned with the needs of the consumer, which again gives me a lot of confidence in our strategy.
That's great. Integration is really hard when it comes to M&A. Culture is really important at Rocket and Redfin and Mr. Cooper. How are you looking to ensure culture is consistent and additive when bringing the three companies together?
Yeah. Great question. I think it's an essential question. I think there's a couple of things I would say. I think the first thing is you have to take it seriously. These are complex and they require an extremely sort of measured and rigorous approach. Part of it is we know this is because, you know, Mr. Cooper in particular has done many acquisitions successfully. There are a set of best practices and playbooks. You obviously have to leverage that. We've got integration work streams. We've got 35 work streams. We've got integration steering committees. We've got the best consultants. We've got clear goals. Just quite frankly, it is a priority.
The second thing, you know, that I would say just from a culture perspective is we're just spending a lot of time together and we're thinking deeply about each of the individual work streams. You know, there's a work stream around regulatory efforts, for example. There's a work stream around organizational efforts. There's a work stream around strategy and execution. We're just kind of, we're working through it with a pretty rigorous project plan. We're leveraging the best practices. We're setting clear goals. I think the most important thing from a culture perspective is just spending time together, you know? I think at some level, culture is a human condition, right? It is something that is created by people. It's not about what you know. It's like how do you communicate and how do you spend time together?
We're trying to do that as much as possible. We're also being thoughtful because culture is not necessarily static. Culture is also a little bit dynamic. I think one thing that gives me a lot of confidence is that the existing cultures of each of the organizations are remarkably complementary. I say this just from direct observation, having spent time in Seattle and Dallas meeting with the leadership team and doing the same and just getting a little bit of cross-training in. The starting point to me is leaders that are having open, candid conversations that are, you know, working together, that are making progress and just some of the emotional constructs that happen when relationships are building. The fact that that's happening, I think it just gives me confidence that we're on the right track.
To what degree do you believe these transactions will serve as a catalyst in the broader homeownership and mortgage space, and how will Rocket potentially evaluate future transactions in the market?
Yeah. I mean, I think we've got our hands pretty full right now, to be totally fair to the team, because I think just getting these right is foundational. And sort of establishing conviction behind our execution plan is our top priority. We're all in and sort of very focused on that. I think that just, you know, look, at the end of the day, you know, we just believe in our mission. We're going to be very focused on execution. You know, I feel like we, you know, the thing that I think is interesting is that like in the homeownership space, it is such an adversarial relationship, right? I think part of the reason that I believe in these acquisitions is because I believe in the leaders of these companies.
The founding sort of starting point of us working together, it was not the intellectual logic of the deal. It was that we had a shared view of the future of homeownership. The outcome of that shared view was the intellectual logic of the deal. It started with like a team that wanted to work together, wanted to win together. From my perspective, you know, we may have, this may be a catalyst to kind of create some sort of change in the industry. I would say that is like a really good thing because the industry needs change. Homeownership needs modernization. You know, it is sort of the last frontier of modernization in some sense. You know, I think that is healthy as someone who is a champion for the ecosystem, not just for Rocket and for housing.
You know, and I think we play an important role as stewards of that industry, you know, for all. From that perspective, I think hopefully it's a healthy catalyst for needed change.
Yeah. Mr. Cooper had been on their own journey of using AI to help the servicing business. How do you think what they've built and what they've done on the servicing side helps Rocket on servicing? How does Rocket bring recapture and technology into their business?
Yeah. I think what's great here is this is a very healthy conversation about an equilibrium between, you know, two different very strong servicing organizations and philosophies and approaches to achieve a one plus one equals 11. For example, to do what Mr. Cooper does at the scale that they do requires best in class technology, best in class net promoter score analysis, targeting capabilities, best in class contact reduction capabilities. You know, they have technologies like Agent IQ and Pyro that I think are just light years ahead. I think when you look at Rocket, I mean, obviously our origination business is the equivalent, you know, the Rocket Logic platform, just everything we do with origination, title, and closing. I mean, that's highly complementary.
I think what's interesting is when you look at our servicing platform, there are things that we do really well at Rocket as well around what we call our love protective maze philosophy. The reason our recapture rate is so high is because we take care of the little things. Taking care of those little things actually allows you to generate the next loan and the loan after that and the loan after that. What I think is additive about the Rocket servicing approach and origination connecting with the Mr. Cooper servicing approach is that you get to build a different kind of LTV model. You know, in a standalone basis, the origination is a transaction and then it's sold off. In Rocket's case, you sort of retain the servicing.
When you add that with recapture, you know, your LTV model is now more interesting because you may earn the right to serve two loans, three loans, five loans, all of the loans. What that does, I think, is create a much, much more interesting economic value proposition from both a growth and value perspective. You know, that's a little bit of how we think they work together and kind of create a super stack.
Switching gears just a little bit, as part of the, excuse me, the Redfin announcement, you announced the collapse of the Up-C structure. What does that mean for this, what are the strategic implications? What does that mean for Rocket on a go-forward basis?
I mean, I just think it makes us a little more healthier for the investment community. You know, it changes the nature of a float. It eliminates some of the complexity around ownership structure. It just makes us, I just think, a better investment collectively for the investment community. It's simpler. The other thing I would just say is in lieu of us, you know, pursuing two large public company acquisitions, it also simplifies the structure for integrating that greater whole as well. I mean, I just think it has, you know, quite a few benefits from those perspectives. That's the context. Yep.
Last question related to these transactions. You have a, from your investor day, stated goal of getting to 8% purchase market share, 20% refi market share. How do these help you get there? Is it additive? Is it complementary? And are we on that track?
Yeah. I mean, I think it's definitely an accelerant to our goals. You know, we declare the goals independently of our inorganic strategy. I mean, we want to be very clear that we're going to build it like we're not buying it. And then we're going to accelerate with inorganic as long as it's in service to our strategy. When you look at it, we do see a very direct correlation between this and accelerating success. You know, having a relationship at the top of funnel and with real estate agents allows you to build a stronger organic purchase business. You know, having a servicing book allows you to build an organic servicing recapture business. Being able to have a larger book of business, you know, allows you to grow your refund share. And so, you know, we do think that they strengthen and reinforce each other.
Yeah, I would describe it as these are going to be an accelerant for our goals.
Excellent. We live in very volatile times these days. Where do you think the mortgage market is going with rates and the swings that we've seen and tariffs and all of the other big announcements? What's your vision? What's your view on the mortgage market?
Yeah. I mean, I think it's very difficult to predict for a multitude of factors. I would say that I think we're in an era of innovation right now. The optimist in me believes that there's lots of ways to attack housing. I look at mortgage as a proxy for housing. You can probably tell for me it's about housing, safe, sustainable housing. I do think that over the coming years, you're going to start to see what technology can do to transform things. I mean, a lot of people bet big on AI, but what they don't realize is the applications of AI will be even greater. You know, AI will play a big role in robotics. AI will play a big role in 3D printing, in materials engineering.
You know, correlating effects from these innovations will allow you to make a bigger dent in what it might cost to actually manufacture a house or manufacture a supply chain around a house. I think the optimist in me believes, you know, there's obviously going to be cyclical dynamics in the short term. That's just the nature of the mortgage market. The good news is it's still a really big market and it can be so much bigger. I think the problem will get attacked from lots of different vectors. I think there's just an opportunity for it to become, you know, better. That's sort of where I stand. I mean, that's what I think what we champion. I think there's going to be a lot of innovation in the space.
It is going to be from many, many different angles, not just from the financing aspect of a home alone. That is why I think a lot of our strategy is to connect other parts of the experience in the hopes of being able to do something that is significantly more value creating.
Excellent.
Yeah.
I think we leave it there on the optimistic note. Bryn, thank you for joining us.
Pleasure.
We really appreciate it. Appreciate the time. Thanks for everyone for joining.
Thank you.