Onity Group (ONIT) Q1 2026 earnings summary

Executive summary

• Achieved double-digit year-over-year growth in adjusted revenue, origination volume, subservicing additions, and total servicing UPB in Q1 2026.

• Net income attributable to common stockholders was $7 million ($0.74 diluted EPS), with adjusted pre-tax loss of $6 million, reflecting mortgage rate volatility, higher refinancing, and elevated FHA delinquencies.

• Origination profitability partially offset higher MSR runoff and servicing losses amid record prepayments, market volatility, and elevated FHA delinquencies.

• Revised transaction with Finance of America Reverse resubmitted to Ginnie Mae for approval, expected to generate $70–80 million in proceeds and strengthen subservicing and liquidity.

• Completed $10 million share repurchase program and issued $200 million in senior notes to support growth and liquidity.

Financial highlights

• Q1 2026 total revenue was $294 million, up 18% year-over-year; adjusted revenue was $278 million, up 26% year-over-year.

• Book value per share increased by $17 year-over-year to $74.81–$75.

• Available liquidity at quarter-end was $277 million, including $182 million in cash.

• Operating expenses rose 10% year-over-year to $132 million, mainly from higher compensation and origination costs.

• Net cash used in operating activities was $1.59 billion, reflecting pipeline growth and MSR investments.

Outlook and guidance

• Full-year 2026 adjusted ROE guidance revised to 10%-15% from 13%-15% due to ongoing rate volatility and market uncertainty.

• Servicing and subservicing portfolio expected to grow through multi-channel originations, MSR acquisitions, and subservicing, but 2026 fee revenue will decline due to Rithm contract termination.

• Originations volume is forecast to outpace industry growth, with a focus on Consumer Direct and selective Correspondent expansion.

• Reverse mortgage origination will wind down after the FAR sale closes, shifting to subservicing revenue.

• Operating expenses are expected to decrease as a result of the Rithm deboarding and productivity gains.