Rithm Capital (RITM) Q2 2024 earnings summary

Executive summary

• Reported Q2 2024 GAAP net income of $213.2 million ($0.43 per diluted share) and earnings available for distribution of $231.1 million ($0.47 per share), with a 3.7% economic return and 15% ROE.

• Book value per share rose to $12.39, up 1.6% sequentially, and a $0.25 per share dividend was declared, yielding 9.2% as of June 30, 2024.

• Completed major acquisitions: Computershare Mortgage Services/SLS ($708 million, adding $56 billion in MSRs and $98 billion in third-party servicing UPB), and Great Ajax management contract.

• Grew total assets to $42.0 billion, AUM to $32.1 billion, and total equity to $7.4 billion.

• Strong performance across Newrez, Genesis, and Sculptor, with each segment gaining market share and delivering robust returns.

Financial highlights

• Q2 2024 GAAP net income: $213.2 million; earnings available for distribution: $231.1 million; revenues: $1.23 billion.

• Book value per share: $12.39 at June 30, 2024; dividend: $0.25 per share (9.2% yield); cash and liquidity: $1.5 billion.

• Origination funded production volume reached $14.6 billion, up 35% sequentially and 47% year-over-year.

• Q2 2024 ROE (annualized, based on net income to common) was approximately 14.1%; EAD ROE was 15%.

• Dividend payout ratio for the six months was approximately 51% of net income to common.

Outlook and guidance

• Well-positioned for Fed rate cuts expected in September, which should lower borrowing costs and boost earnings.

• Management targets further growth by leveraging omnichannel origination, expanding third-party servicing, and scaling SFR and asset management platforms.

• Focus remains on disciplined capital allocation, operational efficiency, and leveraging direct lending and asset management platforms.

• Anticipates continued market volatility and sees significant opportunity in private credit and commercial real estate.

• Sufficient liquidity expected to meet needs over the next 12 months, supported by cash, operations, and ability to roll secured financings.