Rithm Capital Corp. (RITM) Reports First Quarter 2025 Earnings Results

Rithm Capital Corp. (RITM) today announced its financial results for the recent quarter, revealing a challenging period for the company. The company reported a quarterly revenue of $570.8 million, significantly below the estimated $1.26 billion, marking a substantial miss. Additionally, Rithm Capital’s earnings per share came in at $0.07, falling short of the expected $0.47, further highlighting the difficulties faced during this quarter.

Key Highlights:

• Rithm Capital reported a GAAP net income of $36.5 million for Q1 2025, with earnings available for distribution at $275.3 million.
• The company declared a common dividend of $132.5 million, maintaining a dividend of $0.25 per share.
• Rithm Capital completed a $878 million secured financing backed by mortgage servicing rights, marking the largest-ever MSR debt issuance.
• Newrez, Rithm’s mortgage origination and servicing platform, posted a pre-tax income of $270.1 million, with a 19% pre-tax return on equity.
• Genesis Capital recorded a pre-tax income of $22.4 million, with origination volume reaching a record $895 million for Q1.
• Sculptor Capital, Rithm’s alternative asset manager, grew its assets under management to approximately $35 billion.

Summary:

Rithm Capital Corp. announced its financial results for the first quarter of 2025, highlighting a GAAP net income of $36.5 million and earnings available for distribution of $275.3 million. The company maintained a common dividend of $0.25 per share, totaling $132.5 million. CEO Michael Nierenberg emphasized the company’s strong performance despite challenging economic conditions, attributing success to their diversified platform and innovative strategies. Notably, Rithm completed a significant $878 million secured financing backed by mortgage servicing rights, marking a milestone in MSR-backed financing. The company’s various segments showed robust growth, with Newrez achieving a pre-tax income of $270.1 million and a 19% pre-tax return on equity. Genesis Capital reported a record origination volume of $895 million, while Sculptor Capital expanded its assets under management to $35 billion. These achievements underscore Rithm’s strategic focus on leveraging its core operating businesses to drive growth and shareholder value.

The company remains optimistic about its future prospects, supported by its strong asset management, origination, and servicing platforms. Rithm Capital’s strategic initiatives, such as the largest-ever MSR debt issuance and the expansion of its alternative asset management arm, Sculptor Capital, reflect its commitment to innovation and growth. The management’s focus on maintaining a diversified platform and exploring new financing opportunities positions the company well for continued success in the evolving financial landscape. CEO Michael Nierenberg’s remarks highlight the company’s resilience and adaptability, reinforcing confidence in Rithm’s ability to navigate economic challenges while delivering value to shareholders.

Rithm Capital Corp. (RITM) has experienced a rollercoaster ride in its stock price over the past year, with a notable 2.34% increase over the year despite a recent one-month dip of 9.81%. This volatility is reflected in the company’s fundamental metrics, where a price-to-earnings ratio of 10.84 suggests a relatively modest valuation compared to the broader market. The company’s earnings per share (EPS) has shown a robust two-year compound annual growth rate (CAGR) of 25.36%, indicating strong earnings growth potential. However, the revenue growth has been more subdued, with a two-year CAGR of just 3.58%, which may raise concerns about the sustainability of its earnings momentum. The negative net profit margin of -1.36% is a red flag, suggesting that the company is currently not profitable, which could be a significant factor in the recent price decline. Despite these challenges, the return on invested capital (ROIC) of 4.03% indicates that Rithm Capital is generating some value from its investments. Investors may be cautiously optimistic, hoping that the company’s strong EPS growth can eventually translate into improved profitability and more stable stock performance.

Rithm Capital Corp. provides capital and services to the real estate and financial services sectors in the United States. Its investment portfolio comprises mortgage servicing related assets, residential securities and loans, and consumer loans. It qualifies as a real estate investment trust for federal income tax purposes. The company generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is headquartered in New York, New York.