STARWOOD PROPERTY TRUST, INC. (STWD)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 DE per diluted share was $0.45 and GAAP EPS was $0.33; investment activity accelerated with $2.3B committed ($1.4B commercial, record $0.7B infrastructure), and another $1.3B closed after quarter-end .
• Liquidity remained strong at $1.5B, corporate maturities pushed out to 3.7 years (no corporate debt due for >1 year), and adjusted debt-to-undepreciated equity at 2.25x, positioning STWD to lean into a favorable origination backdrop .
• Consensus EPS was essentially met/beat: $0.45 actual vs $0.448 consensus; S&P “Revenue” series shows an actual below consensus, though this series is not comparable to the company’s reported “Total revenues” (see Estimates Context) (S&P Global data*).
• Management expects the balance sheet to “grow materially” in 2025, supports maintaining the $0.48 dividend (Q2 dividend declared on June 12), and highlighted large pipelines in data centers and multifamily as catalysts .

What Went Well and What Went Wrong

• What Went Well

  • Robust investment pace: $2.3B in new commitments (highest in nearly three years); infra lending posted a record $677M of commitments in a single quarter since the 2018 acquisition .
  • Funding and financing strength: $500M 5.5-year 6.5% senior unsecured sustainability notes issued post-quarter (swapped to SOFR + 261 bps), raising/rolling $4B in debt/equity over the last year; corporate maturity profile extended to 3.7 years with no near-term maturities .
  • Constructive credit signals: CECL reserve down $26M to $456M; asset resolutions of $230M at or above GAAP basis; U.S. office exposure declined to 9%; no new additions to 4/5-rated categories .

• What Went Wrong

  • GAAP EPS down YoY and sequentially from recent highs; net income margin pressured vs Q1 2024 as the company transitions from asset sales-driven gains last year to origination-driven earnings ramp this year .
  • Timing of closings muted Q1 interest income contribution (many originations back-end loaded), pushing some earnings benefit to Q2; management acknowledged the effect and expects improvement as loans season .
  • Legacy asset drag persists with select nonaccruals/office exposure; while progress is occurring, some office assets (e.g., downtown LA) may push into 2026+ for resolution .

Financial Results

Quarterly GAAP results and DE per share

Consensus vs. actual (S&P Global where available)

Note: S&P’s “Revenue” series is not comparable to STWD’s reported “Total revenues” ($418.2M); see company-reported line above for GAAP total revenues . Values retrieved from S&P Global.*

Q1 2025 segment DE contribution

Select Q1 2025 KPIs

Guidance Changes

No formal numeric revenue/EPS guidance provided; management emphasized elevated investment pace and dividend stability .

Earnings Call Themes & Trends

Management Commentary

• “We entered 2025 with significant financial flexibility, diversified business lines, and a solid investment portfolio… Dislocation in securitized markets… creates outsized opportunities for us.” — Barry Sternlicht, CEO .
• “We expect our balance sheet to grow materially this year, allowing us to maintain a dividend that we have paid for 45 straight quarters.” — Jeffrey DiModica, President .
• “CECL reserve decreased by $26 million… resolutions of $230 million… at pricing at or above our GAAP basis… undepreciated book value of $19.76.” — Rina Paniry, CFO .
• “The economy is going to weaken… rates will be lower… That is all good for the property segment… We probably never entered this period with a better balance sheet [or] more opportunities.” — Barry Sternlicht .
• “We’ve been leaning in on three investment themes… data centers, Europe and multifamily… vast majority [of Q2 pipeline] on multifamily assets in the U.S.” — Jeffrey DiModica .

Q&A Highlights

• Asset resolutions/nonperforming loans: Management detailed expected 2025 progress across apartments and offices; some LA offices could extend into 2026+; select assets have credible sale/leasing paths at or above basis .
• Residential credit strategy: Evaluating re-entry via originator/platform; weighing build vs. buy; near-term capital tilts to CRE and energy infrastructure given cost of capital and return profile .
• M&A/consolidation: Corporate M&A needs willing sellers; focus on accretive deals with G&A synergies; feasibility improves when targets trade closer to book (70–80%) vs. deep discounts .
• Timing of interest income: Back-end loaded Q1 closings masked run-rate; management expects improved contribution as loans season and pipeline remains strong .
• Subordinate debt opportunities: Expect to earn more on loans reflecting steeper credit curves; selective in B-piece/secondary CMBS given leverage aversion and return hurdles .

Estimates Context

• Q1 2025 EPS: $0.45 actual vs $0.4483 consensus — a slight beat on S&P Global’s “Primary EPS” series (close in-line) (S&P Global data*).
• Q1 2025 Revenue: S&P’s “Revenue” series shows $126.0M actual vs $478.8M consensus (S&P Global data*). Note: This series is not comparable to STWD’s GAAP “Total revenues,” which were $418.2M for Q1 2025. For company-reported revenues, use the GAAP series in the Financial Results table .
• Implication: We expect the Street to focus on DE stability and the origination ramp rather than the non-comparable revenue construct; pipeline commentary and lower CECL should support upward bias to forward DE trajectory if deployment sustains .

Values retrieved from S&P Global.*

Key Takeaways for Investors

• Deployment is re-accelerating across CRE and infrastructure; with $1.5B liquidity and extended maturities, STWD is positioned to capture spreads in a constrained lending market .
• Credit signals improved (lower CECL, asset resolutions at/above basis, office down to 9%), reducing tail risk and supporting a steadier DE base .
• Dividend durability is reinforced: management expects material balance sheet growth and declared another $0.48 for Q2 2025 .
• Thematically focused pipeline (data centers, multifamily, Europe/US) should provide diversified earnings streams; near-term Q2 tailwind from Q1 back-end closings .
• Capital markets access remains a differentiator (tight unsecured prints, increased tenor), enabling offense while peers remain capital constrained .
• Watch catalysts: additional CLOs/term financing, data center loan fundings, further asset resolutions, and any strategic/portfolio actions that monetize $4.9B unencumbered assets or $1.5B unrealized property gains .
• Risk monitor: select office/nonaccrual exposures (timing of resolutions), macro rate path, and spreads in SA/SB CMBS and subordinate credit positioning .

Citations:

• Q1 2025 press release and segment/DE/balance sheet tables .
• 8-K including Exhibit 99.1 (press release) .
• Q1 2025 earnings call transcript (prepared remarks and Q&A) .
• Prior quarters’ press releases for trend comparison (Q4 2024, Q3 2024, Q1 2024) .
• Q2 2025 dividend declaration press release .
• S&P Global consensus/actuals: EPS and Revenue (Q1 2025). Values retrieved from S&P Global.*