Executive Summary

Q4 2024 delivered a sharp rebound: GAAP net income rose to $263.2M ($0.50 diluted EPS) and non‑GAAP Earnings Available for Distribution (EAD) increased to $315.8M ($0.60 per diluted share), supported by a positive MSR fair value swing and strong asset management revenues .
Origination & Servicing posted 20% pre‑tax ROE on $5.6B equity, with funded production up 9% QoQ to $17.3B and total servicing UPB reaching $844B; third‑party servicing UPB grew 129% YoY to $254B .
Sculptor drove a seasonal step‑up in Q4 asset management revenues ($258.9M), with AUM ~$34B and continued fundraising momentum (Real Estate Fund V commitments $2.3B through 2024; SDREIT pro‑forma AUM $500M) .
Capital allocation: Board renewed repurchase authorizations through Dec 31, 2025 (up to $200M common and $100M preferred) and completed a first‑of‑its‑kind $461M secured term financing backed by MSRs—potential stock catalysts via capital return and structural innovation .
Management reiterated undervaluation vs “sum‑of‑the‑parts,” highlighted potential capital structure changes (REIT scale‑up, possible C‑Corp conversion, optional listing of Newrez) and near‑term launch of a global energy infrastructure platform focused on data center power—incremental narrative and optionality for 2025 .

What Went Well and What Went Wrong

What Went Well

Positive MSR mark and strong fee seasonality drove results: “Asset management revenues” surged to $258.9M in Q4 (from $81.0M in Q3), while “Change in fair value of MSRs” swung to +$563.5M (from −$747.3M in Q3), lifting consolidated revenues to $2.10B .
Newrez execution across origination and servicing: Q4 pretax income excluding MSR mark‑to‑market reached ~$280.2M (+12% QoQ), 20% pre‑tax ROE; funded production $17.3B (+9% QoQ) and third‑party servicing UPB growth sustained (net +$21B QoQ) .
Strategic momentum: Sculptor AUM ~$34B with accelerating fundraising (Real Estate Fund V: total commitments $2.3B through 2024), and corporate renewal of $300M total buyback capacity (common + preferred) .

Management quotes:

“We had another great year at Rithm, finishing strong with robust earnings, positive inflows and growth in each of our business segments.” — CEO Michael Nierenberg .
“Newrez delivered another strong quarter… fourth quarter pretax income excluding mark‑to‑market of approximately $280 million… delivering a 20% ROE.” — President of Newrez, Baron Silverstein .

What Went Wrong

Investment portfolio and corporate headwinds: Q4 income before taxes in Investment Portfolio was −$9.0M; Corporate Category −$39.9M, partly offsetting segment gains .
Expense intensity: Compensation and benefits rose to $362.9M (Q4) vs $265.7M (Q3), reflecting seasonal asset management accruals and broader platform scaling .
Limited explicit guidance: No formal revenue/EPS guidance; capital structure moves (REIT scale‑up, potential Newrez listing) remain aspirational rather than dated milestones; dividend held at $0.25 despite EAD coverage .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Total Revenues ($USD Thousands)	$709,471	$1,260,618	$619,514	$2,100,950
GAAP Net Income Attributable to Common ($USD Thousands)	$(87,526)	$213,161	$97,024	$263,222
Diluted EPS ($USD)	$(0.18)	$0.43	$0.20	$0.50
EAD ($USD Thousands, Non‑GAAP)	$247,404	$231,116	$270,327	$315,792
EAD per Diluted Share ($USD)	$0.51	$0.47	$0.54	$0.60
Dividend per Share ($USD)	$0.25	$0.25	$0.25	$0.25
Book Value per Common Share ($USD)	$11.90	$12.39	$12.31	$12.56

Segment breakdown (Revenues and Pre‑Tax Income):

Segment	Q3 2024 Total Revenues ($USD Thousands)	Q4 2024 Total Revenues ($USD Thousands)	Q3 2024 Income Before Taxes ($USD Thousands)	Q4 2024 Income Before Taxes ($USD Thousands)
Origination & Servicing	$339,036	$1,663,498	$15,221	$484,715
Investment Portfolio	$127,896	$101,675	$33,808	$(9,013)
Residential Transitional Lending	$66,262	$67,278	$35,148	$3,454
Asset Management	$86,320	$268,496	$5,955	$53,363
Corporate Category	—	$3	$(44,984)	$(39,922)

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Total Servicing UPB ($USD Billions)	$645	$755	$844
Third‑Party Servicing UPB ($USD Billions)	$98 added via SLS close (disclosed addition)	$233	$254
Origination Funded Volume ($USD Billions)	$14.6	$15.9	$17.3
Origination & Servicing Pretax Income excl. MSR M2M ($USD Millions)	$247.7	$245.9	$280.2
Origination & Servicing Pretax ROE (%)	23%	24%	20%
Asset Management Revenues ($USD Millions)	$109.4	$81.0	$258.9
Sculptor AUM ($USD Billions)	~$32	~$34	~$34
Genesis Origination Volume ($USD Billions)	$0.836	$0.761	$1.2
Genesis Pretax Income ($USD Millions)	$31.7	$35.1	$3.5 (quarterly, segment name changed)

Drivers and context:

The Q4 revenue surge reflects a large positive “Change in fair value of MSRs” (+$563.5M) and strong asset management revenues, while Q3 had a large negative MSR fair value change (−$747.3M) .
EAD progression (Q2→Q3→Q4: $231.1M → $270.3M → $315.8M) shows core earnings strength across segments despite volatility in GAAP marks .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Common Share	Q4 2024	$0.25 per share (ongoing)	$0.25 per share	Maintained
Stock Repurchase Authorization (Common)	Through 12/31/2025	Program expired 12/31/2024	Up to $200M authorized	Renewed
Stock Repurchase Authorization (Preferred)	Through 12/31/2025	Program expired 12/31/2024	Up to $100M authorized	Renewed
Capital Structure/Listing	2025 Outlook	Exploration ongoing (Q3/Q2 commentary)	Management aims to scale REIT, consider C‑Corp conversion and evaluate optional Newrez listing; no formal timeline; aspiration for 2025 if feasible	Strategic evaluation (no numeric guidance)
Operating Segment Reporting	Q4 2024	Prior presentation had MSRs serviced by others and MSR hedge in Investment Portfolio	Newrez segment now includes those MSRs and hedge to reflect economics; aids comparability	Methodology update

No explicit quantitative guidance was issued for revenue, margins, OpEx, or tax rate in Q4 2024 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Capital structure and valuation	Sum‑of‑the‑parts introduced; exploring options to unlock value	Reinforced undervaluation; potential Newrez listing likely a 2025 event	Undervaluation reiterated; REIT scale‑up, possible C‑Corp conversion, Newrez listing optionality discussed	Consistent, building toward 2025 optionality
Asset management (Sculptor)	CLOs closed; strong performance; fundraising ongoing	Real Estate Fund V first close $1.3B; CLO $400M; AUM building	Seasonal performance fees lifted Q4 revenues; ~$34B AUM; broader fundraising momentum	Improving AUM and fee seasonality
Origination & Servicing execution	SLS integration; origination up 35% QoQ; 23% ROE	Funded volumes +9% QoQ; margins improved; third‑party servicing growth; cost per loan leadership	Pretax excl. MSR M2M ~$280M (+12% QoQ); 20% ROE; funded production +9% QoQ; UPB 844B	Sustained scale and profitability
Macro (rates, deficits, election)	Expect Fed cuts; volatility; private credit growth	Steepening curve; book value stability; liquidity position	Emphasis on power shortages, election uncertainty, tariffs; maintain hedging/close to home stance	Persistent macro vigilance
Energy infrastructure/data center power	Not discussed	Not discussed	Expect to announce global energy infrastructure platform within ~30 days; focus on power for data centers	New initiative
RTL/Genesis	Growth trajectory; record securitizations; disciplined credit	Record quarter; ROE ~18%; sponsors growing; low delinquencies	Q4 pretax $3.5M; origination volume $1.2B; sponsors up 14% YoY	Expanding but moderated in Q4
MSR financing innovation	—	MSR and hedge allocation/term financing considerations	Completed $461M non‑recourse term financing of MSRs (first‑of‑its‑kind)	Structural innovation

Management Commentary

“The company had a great fourth quarter and a great year… the combined entity is about $80 billion of AUM, $7.8 billion of permanent capital, and the company makes a little north of $1 billion a year.” — Michael Nierenberg .
“We expect to announce soon, probably in the next 30 days, a global energy infrastructure platform… supplying power to data centers across the world.” — Michael Nierenberg .
“Our 2025 strategy… focused on growing our brand… customer retention and recapture… being opportunistic on MSR and platform acquisitions… improved efficiency through our AI initiatives and our technology.” — Baron Silverstein .
“Third‑party servicing franchise had a great quarter… added $21B net notional UPB, up 9% QoQ… cost leadership enabled transfer of 1.2M loans in 2024.” — Baron Silverstein .

Q&A Highlights

Newrez listing and capital structure: Management is working on scaling the REIT and evaluating a C‑Corp structure; an IPO or listing of Newrez remains optional—targeting 2025 if feasible, but not guaranteed .
Leverage and hedging: Most balance sheet leverage relates to MSR hedging; capacity to adjust leverage prudently exists; balance sheet is “very hedged” to minimize book value volatility .
Subservicing growth/Shellpoint: Continued wallet share gains and strong demand in non‑QM; Newrez remains leading special servicer for non‑QM assets .
Dividend policy: Board maintains $0.25 common dividend despite EAD coverage; focus on reinvesting capital for higher ROE and enterprise value; buyback programs renewed .
Macro tone: Affordability headwinds (rates, insurance), cautious on refinance wave; portfolio consumers broadly resilient; maintaining high liquidity .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to request limits; as a result, we cannot definitively classify beats/misses versus consensus this quarter. Values would typically be sourced from S&P Global; unavailable in this instance.
With strong EAD and asset management revenues, and a positive MSR fair value swing, sell‑side estimates may need upward adjustments for asset management fee seasonality and MSR mark sensitivity in Q4 prints; however, formal consensus comparison is not possible here [S&P Global consensus unavailable].

Key Takeaways for Investors

Q4’s earnings strength was driven by MSR valuation tailwinds and seasonal asset management fees; underlying EAD trend is positive across 2024—actionable for near‑term positioning ahead of Q1 seasonality .
Newrez’s scale (844B UPB) and third‑party franchise growth support durable fee income and ROE; origination margins improved, with funded volumes up QoQ—constructive for operating leverage .
The $461M non‑recourse MSR term financing and renewed $300M aggregate repurchase authorizations offer catalysts for both structural valuation and capital return—watch for incremental deployment .
Sculptor’s Q4 fee seasonality underscores earnings optionality; ongoing fundraising in real estate and CLOs should continue to diversify and stabilize fee‑related earnings over time .
Strategic optionality (REIT scale‑up, potential C‑Corp conversion, optional Newrez listing) could re‑rate the equity; monitor 2025 developments and any energy infrastructure platform launch .
Risk watch: Expense intensity, investment portfolio losses, and macro affordability (rates/insurance) remain headwinds; hedging keeps book value stable, but MSR marks can be volatile QoQ .
Trading implications: Near term, headline strength from Q4 and capital return may support the stock; medium term, valuation re‑rating depends on execution in asset management growth, private credit expansion, and capital structure moves .

References: Q4 2024 8‑K press release and exhibits ; Q4 2024 earnings call transcript ; Q3 2024 8‑K and call ; Q2 2024 8‑K and call ; Prior‑year Q4 2023 8‑K .

Rithm Capital Corp. (RITM)·Q4 2024 Earnings Summary