Executive Summary

Q2 2025 delivered strong profitability: GAAP net income was $283.9M ($0.53 diluted EPS) and Earnings Available for Distribution (EAD) was $291.1M ($0.54 per diluted share), with book value per share of $12.71 and a $0.25 common dividend .
Versus S&P Global consensus, EPS modestly beat (Actual: $0.54 vs $0.523*) while revenue missed (Actual: $0.998B vs $1.122B*). Drivers included robust origination/servicing, asset management inflows, and continued MSR valuation volatility* .
Segment execution was broad-based: Newrez posted $275.1M pre-tax (ex-MSRS/hedge) and 19% ROE; servicing UPB reached $864B; origination volume rose to $16.3B. Genesis set a quarterly record with $1.2B originations; Sculptor AUM reached ~$36B with $1.7B gross inflows .
Management emphasized a “results-first” platform, record liquidity (~$2.1B), and an expanding ABF and credit offering including a new SMA for RTL with potential to upsize to $1.5B, positioning asset management as a key revaluation catalyst .

What Went Well and What Went Wrong

What Went Well

Newrez posted $275.1M pre-tax income (ex-MSRS/hedge) and a 19% ROE; servicing UPB hit $864B and origination volume reached $16.3B, demonstrating scale and resilience .
Genesis delivered a record $1.2B in originations (+49% YoY) with pre-tax income of $26.9M (ex-portfolio marks), expanding its sponsor base to 195 (+30% YoY) .
Asset management momentum: Sculptor AUM grew to ~$36B with $1.7B gross inflows; the platform executed $525M in CLO activity and held the final close for Tactical Credit Fund at $900M . Management underscored “performance matters first” and having an “edge” in ABF sourcing .

What Went Wrong

Revenue missed consensus for Q2 2025, reflecting ongoing classification/volatility in MSR valuation and hedge impacts; Q2 MSR fair value change was $(155.0)M (vs Q1 $(333.4)M), still a headwind* .
Competitive mortgage markets pressured origination margins; management highlighted margin compression despite volume growth .
Interest expense remained elevated ($417.9M), reflecting balance sheet leverage and funding costs, even as liquidity improved .

Financial Results

Key P&L Metrics (GAAP and EAD)

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($USD Thousands)	$2,100,950	$768,379	$1,217,039
Diluted EPS (GAAP) ($)	$0.50	$0.07	$0.53
Net Income Attributable to Common ($USD Thousands)	$263,222	$36,523	$283,899
EAD per Diluted Share ($)	$0.60	$0.52	$0.54

Note: Q2’s 8-K also presents reclassified Q1 revenue of $976,917 vs $768,379 in the Q1 8-K; management frequently notes MSR fair value/hedge impacts can drive period-to-period classification variances .

Segment Net Income (Q2 2025)

Segment	Net Income Attributable to Common ($USD Thousands)
Origination & Servicing	$315,675
Investment Portfolio	$34,103
Residential Transitional Lending (Genesis)	$24,720
Asset Management (Sculptor)	$(3,999)
Corporate	$(86,600)
Total	$283,899

KPIs

KPI	Q2 2025 Value
Book Value per Share	$12.71
Common Dividend per Share	$0.25
Newrez Pre-tax Income (ex-MSRS/hedge)	$275.1M
Newrez ROE (Pre-tax)	19%
Servicing UPB	$864B
Origination Volume	$16.3B
Genesis Pre-tax Income (ex-marks)	$26.9M
Genesis Origination Volume	$1.2B
Sculptor AUM	~$36B
Gross Fundraising Inflows (Quarter)	$1.7B
Liquidity (Record)	~$2.1B
Cash & Cash Equivalents	$1,600,948K

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Common Dividend per Share	Q2 2025	$0.25	$0.25	Maintained
Formal Revenue/EPS Guidance	N/A	None disclosed	None disclosed	N/A

Note: Management did not provide formal quantitative guidance; strategic updates included the RTL SMA ($500M with potential to upsize to $1.5B) and ongoing ABF/credit scaling plans .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Asset-Based Finance (ABF) & Credit	First-of-its-kind MSR term financing; AUM ~34–35B; focus on asset management growth	ABF edge reiterated; Sculptor AUM ~$36B; $1.7B inflows; CLO activity; SMA announced for RTL	Strengthening
AI/Technology Initiatives	Not highlighted in Q4/Q1 press releases	Rezi AI driving cost efficiencies; CIO hire from Rocket; fully loaded cost per loan ~$142	Increasing focus
Macro (Rates, Tariffs)	Financing progress despite macro; MSR financing scalable	Expect 1–2 Fed cuts; yield curve steepening; declining policy uncertainty re: tariffs	Constructive
Non-QM/Product Performance	Origination volumes rising (Q4/Q1)	Non-QM expansion across wholesale and correspondent; potential to double origination; disciplined pricing	Accelerating
Corporate Structure	Repurchase programs; asset management integration	Evaluating C-corp + standalone REIT structure; need scale; focus on FRE growth	Active evaluation
Insurance Expansion	Not highlighted	Pursuing smaller platform entry; potential life/annuity; disciplined on multiples	Exploring

Management Commentary

“The company had a great quarter… everything… continues to perform very, very well” (Michael Nierenberg) .
“We have an edge… we make our own assets. We control the origination, we control the servicing” (on ABF/credit sourcing) .
“Return on equity for the entire company was 17%… record amount of cash and liquidity at $2.1 billion” (Michael) .
“Technology enhancements and AI initiatives are continuing to drive our costs lower… significant gains from our Rezi AI investments” (Baron Silverstein) .
“Strategic partnership… SMA… could be as large as $1.5 billion of loans” (Michael) ; post-quarter, announced $500M RTL acquisition funding with potential upsizing .

Q&A Highlights

Newrez listing: not a near-term event; focus on growing earnings and third-party servicing footprint before any potential separation .
Corporate structure: evaluating a C-corp for asset management and a standalone REIT (need scale and FRE), similar to established models .
Capital allocation: centralized “funnel” approach; allocate to highest-return segments; support Sculptor CLOs (Rithm takes ~50% of CLO equity); maintain discipline on credit .
Macro: anticipate front-end rate cuts and a steeper curve; mortgage spreads could tighten vs corporates; fixed income returns may compress if rates plummet .
Non-QM: expanding wholesale/correspondent; potential doubling of non-QM origination; disciplined pricing amid demand .
Insurance M&A: pursue smaller platform to grow into; potential life/annuity; disciplined valuation; SPAC remains optional tool .
SMA economics: expect both management and performance fees; focus on strategic relationships and capital formation .

Estimates Context

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Result
Primary EPS Consensus Mean ($)	0.523*	0.54	Beat
Revenue Consensus Mean ($USD)	1,122,034,500*	997,578,000*	Miss

Values retrieved from S&P Global.*

Key Takeaways for Investors

EPS beat with solid EAD ($0.54) despite continued MSR valuation volatility; revenue below consensus but underpinned by broad segment strength .
Origination and servicing scale are powerful earnings drivers (UPB $864B; origination $16.3B), while AI/tech (Rezi AI) is lowering unit costs and supporting margin resilience .
Asset management is the revaluation lever: Sculptor AUM ~$36B, $1.7B inflows, CLO activity; strategic RTL SMA (potential $1.5B) broadens fee-earning assets .
Liquidity remains robust (~$2.1B), supporting capital allocation flexibility across segments and potential bolt-ons/M&A (including insurance) .
Corporate architecture optionality (C-corp + REIT) could unlock value as scale and FRE increase; near-term focus is execution vs separation .
Competitive mortgage dynamics mean disciplined pricing matters; management expects margin pressure but leans on technology and customer retention to sustain returns .
Near-term catalysts: fee-based AUM growth, non-QM expansion, RTL SMA ramp, continued third-party servicing wins, and potential macro tailwinds from rate cuts .

Rithm Capital Corp. (RITM)·Q2 2025 Earnings Summary