Earnings Per Share

6 Months Ended

Jun. 30, 2024

The Company applies the two-class method for calculating and presenting earnings per share by separately presenting earnings per share for Class A common stock and Class B common stock. In applying the two-class method, the Company allocates undistributed earnings equally on a per share basis between Class A and Class B common stock. According to the Company’s certificate of incorporation, the holders of the Class A and Class B common stock are entitled to participate in earnings equally on a per-share basis, as if all shares of common stock were of a single class, and in dividends as may be declared by the board of directors. Holders of the Class A and Class B common stock also have equal priority in liquidation. Shares of Class C and Class D common stock do not participate in earnings of Rocket Companies, Inc. As a result, the shares of Class C and Class D common stock are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of earnings per share. RSUs and PSUs awarded as part of the Company’s compensation program are included in the weighted-average Class A shares outstanding in the calculation of basic earnings per share once the units are fully vested.

Basic earnings per share of Class A common stock is computed by dividing Net income (loss) attributable to Rocket Companies by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing Net income (loss) attributable to Rocket Companies by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There was no Class B common stock outstanding as of June 30, 2024 or 2023. See Note 12, Non-controlling Interest for a description of Paired Interests and their potential impact on Class A and Class B share ownership.

Diluted earnings per share reflects the dilutive effect of potential common shares from share-based awards and Class D common stock. The treasury stock method is used to calculate the dilutive effect of outstanding share-based awards, which assumes the proceeds upon vesting or exercise of awards would be used to purchase common stock at the average price for the period. The if-converted method is used to calculate the dilutive effect of converting Class D common stock to Class A common stock.

The following table sets forth the calculation of the basic and diluted earnings per share for the period:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income (loss)	$	177,925	$	139,152	$	468,639	$	(272,331)
Net (income) loss attributable to non-controlling interest	(176,630)		(131,714)		(451,129)		261,246
Net income (loss) attributable to Rocket Companies	$	1,295	$	7,438	$	17,510	$	(11,085)

Numerator:
Net income (loss) attributable to Class A common shareholders - basic	$	1,295	$	7,438	$	17,510	$	(11,085)
Add: Reallocation of Net income (loss) attributable to dilutive impact of pro-forma conversion of Class D shares to Class A shares (1)	—		97,491		—		(198,229)
Add: Reallocation of Net income (loss) attributable to dilutive impact of share-based compensation awards (2)	—		206		—		(269)
Net income (loss) attributable to Class A common shareholders - diluted	$	1,295	$	105,135	$	17,510	$	(209,583)
Denominator:
Weighted average shares of Class A common stock outstanding - basic	139,647,845		126,740,748		138,319,794		125,742,282
Add: Dilutive impact of conversion of Class D shares to Class A shares	—		1,848,879,483		—		1,848,879,483
Add: Dilutive impact of share-based compensation awards (3)	—		3,830,420		—		2,526,432
Weighted average shares of Class A common stock outstanding - diluted	139,647,845		1,979,450,651		138,319,794		1,977,148,197

Earnings (loss) per share of Class A common stock outstanding - basic	$	0.01	$	0.06	$	0.13	$	(0.09)
Earnings (loss) per share of Class A common stock outstanding - diluted	$	0.01	$	0.05	$	0.13	$	(0.11)

(1) Net income (loss) is calculated using the estimated annual effective tax rate of Rocket Companies, Inc.

(2) Reallocation of Net income (loss) attributable to dilutive impact of share-based compensation awards for the three months ended June 30, 2024 and 2023 comprised of zero and $203 related to RSUs and zero and $3 related to TMSPP, respectively. Reallocation of Net income (loss) attributable to dilutive impact of share-based compensation awards for the six months ended June 30, 2024 and 2023 comprised of zero and $(259) related to RSUs and zero and $(10) related to TMSPP, respectively.

(3) Dilutive impact of share-based compensation awards for the three months ended June 30, 2024 and 2023 comprised of zero and 3,760,643 related to RSUs, and zero and 69,776 related to TMSPP, respectively. Dilutive impact of share-based compensation awards for the six months ended June 30, 2024 and 2023 comprised of zero and 2,431,355 related to RSUs and zero and 95,077 related to TMSPP, respectively.

A portion of the Company RSUs, stock options, PSUs, and shares issuable under the TMSPP were excluded from the computation of diluted earnings per share as the weighted portion for the period they were outstanding was determined to have an anti-dilutive effect.

RSUs excluded from the computation for the three months ended June 30, 2024 and 2023 were 28,105,434 and 12,341,157, respectively. Stock options excluded from the computation for the three months ended June 30, 2024 and 2023 were 15,937,719 and 20,146,202, respectively. PSUs excluded from the computation for the three months ended June 30, 2024 and 2023 were 1,055,408 and zero. Shares issuable under the TMSPP excluded from the computation for the three months ended June 30, 2024 and 2023 were 48,242 and zero.

RSUs excluded from the computation for the six months ended June 30, 2024 and 2023 were 28,105,434 and 12,696,722, respectively. Stock options excluded from the computation for the six months ended June 30, 2024 and 2023 were 15,937,719 and 20,146,202, respectively. PSUs excluded from the computation for the six months ended June 30, 2024 and 2023 were 1,055,408 and zero, respectively. Shares issuable under the TMSPP excluded from the computation for the six months ended June 30, 2024 and 2023 were 71,587 and zero.

For the three and six months ended June 30, 2024, 1,848,879,483 Holdings Units were outstanding, together with a corresponding number of shares of our Class D common stock, which were exchangeable, at our option, for shares of our Class A common stock. After evaluating the potential dilutive effect under the if-converted method, the outstanding Holdings Units for the assumed exchange of non-controlling interests were determined to be anti-dilutive and thus were excluded from the computation of diluted earnings per share. The Holding Units were dilutive for the three and six months ended June 30, 2023 and therefore included in the earnings per share calculation.