Mr Cooper Group (COOP) Q1 2025 earnings summary

Executive summary

• Announced a pending combination with Rocket Companies to create a scaled, integrated homeownership platform leveraging AI and technology, with integration planning underway and expected closing in Q4 2025.

• Reported Q1 2025 net income of $88 million, with diluted EPS of $1.35 and tangible book value per share rising to $72.53.

• Servicing portfolio grew 33% year-over-year to $1.5 trillion UPB, maintaining the position as the largest U.S. residential mortgage servicer.

• Integration of Flagstar, the largest acquisition in company history, is complete and delivering benefits.

• Won the 2024 Fannie Mae Star Award in all three categories and Freddie Mac's Sharp Gold Award for servicing excellence.

Financial highlights

• Net income was $88 million, with $255 million in pre-tax operating earnings, offset by an $82 million negative MSR mark and $68 million in adjustments.

• Total revenues for Q1 2025 were $560 million, nearly flat compared to $564 million in Q1 2024.

• Liquidity increased to $3.9 billion, up 14% quarter-over-quarter.

• Tangible net worth to assets ratio improved to 25.5% from 24.4% last quarter.

• Diluted EPS was $1.35, down from $2.73 in Q1 2024.

Outlook and guidance

• Integration with Rocket Companies is expected to create an industry-leading homeownership platform, with post-close planning in progress and anticipated closing in Q4 2025.

• Guidance range for ROTCE remains 16-20%, with operating ROTCE at 16.8% for Q1 2025.

• No stock repurchases expected before the Rocket transaction closes.

• Evaluating early retirement of $500 million in senior notes maturing February 2026.

• Xome and special servicing businesses positioned to generate counter-cyclical revenues during adverse credit cycles.