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Ellington Credit Co (EARN)·Q2 2026 Earnings Summary

Executive Summary

  • No Q2 2026 primary documents are available as of November 20, 2025; this recap uses the latest reported quarter (Q2 2025) and S&P Global consensus for Q2 2026 to frame expectations .
  • Q2 2025: GAAP net income was $4.3M ($0.11 per share), NII was $8.5M ($0.23 per share), NAV/share was $5.99; management highlighted full dividend coverage from NII in September .
  • Portfolio ramp accelerated: CLO portfolio grew ~20% QoQ to $379.6M, with $185.5M in CLO debt and $194.0M in CLO equity; weighted average GAAP yield was 15.5% .
  • Dividend policy maintained at $0.08 per share monthly, reinforcing income focus and coverage narrative .

What Went Well and What Went Wrong

What Went Well

  • Dividend coverage achieved: “Ellington Credit Company achieved full dividend coverage from net investment income in September,” said CEO Laurence Penn, underscoring improved earnings power .
  • Strong NII and active portfolio management: NII of $8.5M ($0.23/share), supported by 92 CLO trades and calls of mezzanine debt positions contributing to realized gains .
  • Portfolio scaling with attractive yields: CLO portfolio rose to $379.6M with a 15.5% weighted average GAAP yield, positioning for sustained income generation .

What Went Wrong

  • Fair value volatility: Net realized/unrealized losses on CLO equity positions and on credit hedges partly offset gains from mezzanine debt .
  • NAV modest vs prior quarter: NAV/share at $5.99, down from $6.12 in Q1 2025 despite distribution effects, reflecting mixed mark-to-market dynamics .
  • Continued sensitivity to CLO equity pricing and market spreads, prompting moderation of new-issue equity exposure amid less favorable terms .

Financial Results

Core Financials and KPIs

MetricQ4 2024Q1 2025Q2 2025
GAAP Net Income ($USD Millions)$(2.0) $10.2 $4.3
GAAP EPS ($USD)$(0.07) $0.27 $0.11
Net Investment Income ($USD Millions)n/a$6.5 $8.5
NII per Share ($USD)n/a$0.17 $0.23
Adjusted NII ($USD Millions)n/an/a$8.5
NAV per Share ($USD)$6.53 $6.12 $5.99
Recurring Cash Distributions ($USD Millions)n/an/a$16.2
Weighted Avg GAAP Yield (%)n/an/a15.5%

Portfolio Breakdown

Portfolio MetricQ1 2025Q2 2025
Total CLO Portfolio ($USD Millions)n/a$379.6
CLO Debt ($USD Millions)n/a$185.5
CLO Equity ($USD Millions)n/a$194.0
Number of Trades (Quarter)n/a92

Revenue and EPS vs Estimates

MetricQ1 2025Q2 2025Q2 2026 (Consensus)
Revenue ($USD Millions)10.58*n/a11.12*
EPS ($USD)0.26*0.11 0.203*

Values with asterisk retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Monthly Common Dividend ($/share)Ongoing (Nov 2025)$0.08$0.08Maintained
Formal Financial Guidance (revenue/margins)n/an/an/aNot provided

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Strategic transformation to CLOsAnnounced and advanced; CLO portfolio grew to $171.1M by Q4 2024; continued ramp into 2025 Accelerated ramp; portfolio at $379.6M; active trading and repositioning Positive execution, scaling
Dividend coverageAdjusted distributable earnings covered dividend in Q4 2024 Full dividend coverage from NII achieved in September Strengthening coverage
CLO market spreads/pricingTightening spreads improving equity economics; cautious on new issuance in Q4 2024 Moderated new-issue equity exposure amid less favorable pricing; added mezzanine debt for yield + protection Selective risk posture
Hedging and downside protectionEmphasis on risk management and diversification Credit hedges reduced downside but carried losses alongside CLO equity marks Balanced but costly protection
Europe vs U.S. CLO exposureDiversification discussed in late 2024 commentary Debt mix ~77% U.S./23% Europe; equity ~95% U.S./5% Europe Diversified footprint maintained

Management Commentary

  • “I’m pleased to announce that Ellington Credit Company achieved full dividend coverage from net investment income in September.” — Laurence Penn, CEO and President .
  • “Results were further enhanced by active trading—encompassing 92 distinct CLO trades during the quarter—as well as by several CLO note redemptions at par on discounted purchases.” .
  • The presentation notes “positive results… driven by strong net investment income,” offset by losses on CLO equity and credit hedges, framing a balanced risk approach .

Q&A Highlights

  • The company scheduled its Q2 2025 conference call for November 20, 2025; webcast and replay were made available via the investor site .
  • A full Q&A transcript was not accessible via our document tools; themes inferred from management’s release/presentation include dividend coverage, cautious stance on new-issue CLO equity, and use of mezzanine tranches and hedges for yield and downside protection .

Estimates Context

  • Q2 2026 S&P Global consensus: EPS 0.203*, Revenue $11.12M*; with Q2 2025 actual EPS 0.11 and NII $8.5M, estimate revisions may reflect continued ramp in income-generating assets and yield environment. Values with asterisk retrieved from S&P Global.
  • Q1 2025 actual revenue $10.58M* vs consensus $10.35M*, showing early traction as the CLO strategy scaled. Values with asterisk retrieved from S&P Global.
MetricQ1 2025Q2 2025Q2 2026 (Consensus)
EPS ($USD)0.26*0.11 0.203*
Revenue ($USD Millions)10.58*n/a11.12*

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Dividend coverage milestone and rising NII enhance visibility on sustained distributions; watch for continued coverage in coming months .
  • Active trading and mezzanine debt positioning supported realized gains; continued discipline on new-issue equity mitigates adverse pricing .
  • NAV trajectory reflects mark-to-market dynamics; focus on yield capture and risk hedging should stabilize NAV over time despite equity/hedge volatility .
  • Portfolio scale-up (to $379.6M) and 15.5% weighted GAAP yield indicate improved income capacity; monitor credit cycles and spread behavior into 2026 .
  • Near-term trading lens: dividend coverage and NII momentum are likely catalysts; potential equity/hedge P&L noise may drive headline sensitivity around marks .
  • Medium-term thesis: continued rotation to mezzanine debt and selective equity exposure should balance yield and protection; execution against spread and call dynamics remains key .
  • Document availability: Q2 2026 materials are not yet published; use S&P Global consensus as interim benchmarks and revisit after release . Values with asterisk retrieved from S&P Global.