Rithm Capital (RITM) Q1 2025 earnings summary

Executive summary

• Delivered a strong Q1 2025 with 8% year-over-year EAD per share growth, 22 consecutive quarters of EAD exceeding common dividends, and robust performance across all business lines despite market volatility.

• Reported GAAP net income of $36.5 million ($0.07 per diluted share) and earnings available for distribution of $275.3 million ($0.52 per diluted share).

• Book value per share was $12.39 at March 31, 2025, with market price at 0.83x book value, indicating significant undervaluation.

• Continued diversification through asset management, residential transitional lending, and opportunistic investments, including the acquisition of Sculptor and Computershare Mortgage Services.

• Sponsored a $230 million SPAC IPO, expanding M&A and off-balance sheet growth opportunities.

Financial highlights

• Q1 2025 EAD was $0.52 per diluted share, up 8% year-over-year; GAAP net income was $36.5 million ($0.07 per share); book value per share ended at $12.39.

• Common stock dividend was $0.25 per share (8.7% yield); $132.5 million in common dividends declared.

• Cash and liquidity stood at $1.9 billion at quarter-end; total assets were $45.3 billion.

• Return on equity was 17% for EAD and 2% for GAAP net income.

• Total revenues were $768.4 million, down from $1.26 billion in Q1 2024, driven by a $541.9 million negative fair value change in MSRs.

Outlook and guidance

• Targeting annualized returns on equity between 15% and 20%, with plans to grow off-balance sheet capital, expand origination and asset management, and pursue capital actions to unlock value by end of 2025.

• Management expects sufficient liquidity for the next 12 months, with $1.3 billion available at regulated subsidiaries and $11.6 billion in available financing capacity.

• The company intends to maintain its REIT status and continue distributing at least 90% of taxable income.

• Expecting continued growth in asset management, especially in ABF, energy, and infrastructure funds.