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Rithm Capital Corp.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 30 October 2025: press release. The quarter’s numbers.

Key takeaways

  • GAAP net income fell on lower per-share earnings: GAAP net income attributable to common stockholders was $193.7 million, or $0.35 per diluted share, against $283.9 million and $0.53 in the second quarter. Source
  • Earnings available for distribution held steady: Earnings available for distribution was $296.9 million, or $0.54 per diluted share, against $291.1 million and $0.54 in the second quarter. Source
  • Newrez pre-tax income rose before MSR marks: Newrez pre-tax income excluding MSR marks was $295.1 million, up from $275.1 million in the second quarter, which excluded a $29.9 million gain. Source
  • Genesis origination volume up 60%: Genesis Capital origination volume was $1.2 billion, up 60% YoY and consistent with the record second-quarter level; new sponsors grew by 71, up 82% YoY. Source
  • Sculptor AUM rose to about $37 billion: Sculptor AUM was about $37 billion at September 30, 2025, against about $36 billion at June 30; gross fundraising inflows were $1.4 billion, against $1.7 billion in the second quarter. Source
  • Crestline agreement adds $18 billion AUM: Crestline Management, L.P., a Fort Worth alternative asset manager with $18 billion AUM at June 30, 2025, covers direct lending, opportunistic credit, NAV lending and insurance. Source
  • MSR valuation change reduced servicing revenue: Change in fair value of MSRs, net of economic hedges, was $(264,351) thousand, against $(155,005) thousand in the second quarter; realized cash flows were $(189,881) thousand. Source
  • Paramount acquisition for about $1.6 billion: Rithm agreed to buy Paramount Group, Inc., an owner and operator of Class A office properties in New York and San Francisco, for about $1.6 billion in cash. Source

“This quarter marks a pivotal step forward in Rithm Capital’s journey, driven by strategic acquisitions, platform expansion, and a disciplined investment approach, as we continue building a diversified, asset management platform,”

Michael Nierenberg, Chief Executive Officer of Rithm Capital

What changed from last quarter

  • New: Definitive agreement to acquire Crestline Management, L.P., an alternative asset manager with $18 billion in AUM. Source
  • New: Definitive agreement to acquire Paramount Group, Inc. for about $1.6 billion in cash. Source
  • New: Forward flow agreement with Upgrade, Inc. to acquire $1 billion in home improvement loans. Source

Results and per-share measures

  • GAAP net income fell on lower per-share earnings: GAAP net income attributable to common stockholders was $193.7 million, or $0.35 per diluted share, against $283.9 million and $0.53 in the second quarter. Source
  • Earnings available for distribution held steady: Earnings available for distribution was $296.9 million, or $0.54 per diluted share, against $291.1 million and $0.54 in the second quarter. Source
  • Book value per share increased: Book value per common share was $12.83 at September 30, 2025, against $12.71 at June 30, 2025. Source

Origination and servicing segment

  • Newrez pre-tax income rose before MSR marks: Newrez pre-tax income excluding MSR marks was $295.1 million, up from $275.1 million in the second quarter, which excluded a $29.9 million gain. Source
  • Newrez return on equity reached 20%: Newrez return on equity was 20% pre-tax on $6.2 billion of equity, excluding MSR marks and related hedge impact; the second-quarter figure was 19% on $5.8 billion. Source
  • Servicing unpaid principal balance up 7%: Total servicing UPB reached $878 billion, up 7% YoY. Third-party servicing UPB was $282 billion, up 21% YoY, from $271 billion in the second quarter. Source
  • Funded production up 3% year over year: Origination funded production volume was $16.4 billion, up 3% YoY; the second quarter was $16.3 billion, up 12% YoY. Source

“The pending acquisition of Crestline meaningfully expands our offering into direct lending and insurance and together with Sculptor, delivers comprehensive product solutions for investors.”

Michael Nierenberg, Chief Executive Officer of Rithm Capital

Investment portfolio and residential lending

  • Non-qualified securitization of $483 million: A non-qualified mortgage securitization totaling $483 million in UPB was completed, against $504 million in the second quarter. Source
  • Upgrade home improvement loan purchases: $234 million of home improvement loans were acquired under the Upgrade forward flow in the quarter, with another $150 million after quarter-end, under a $1 billion agreement. Source
  • Genesis origination volume up 60%: Genesis Capital origination volume was $1.2 billion, up 60% YoY and consistent with the record second-quarter level; new sponsors grew by 71, up 82% YoY. Source

Asset management platform

  • Sculptor AUM rose to about $37 billion: Sculptor AUM was about $37 billion at September 30, 2025, against about $36 billion at June 30; gross fundraising inflows were $1.4 billion, against $1.7 billion in the second quarter. Source
  • European CLO issuance and reset: A European collateralized loan obligation issuance and reset contributed about $585 million of AUM in the quarter, against $525 million of CLO activity in the second quarter. Source
  • Crestline agreement adds $18 billion AUM: Crestline Management, L.P., a Fort Worth alternative asset manager with $18 billion AUM at June 30, 2025, covers direct lending, opportunistic credit, NAV lending and insurance. Source

“Further, the pending acquisition of Paramount significantly enhances our commercial real estate expertise and expands our owner-operator model.”

Michael Nierenberg, Chief Executive Officer of Rithm Capital

Costs, marks and hedging

  • MSR valuation change reduced servicing revenue: Change in fair value of MSRs, net of economic hedges, was $(264,351) thousand, against $(155,005) thousand in the second quarter; realized cash flows were $(189,881) thousand. Source
  • Newrez hedge mark-to-market loss: Net of hedge MSR mark-to-market was a loss of $(61.0) million in the third quarter, against a gain of $29.9 million in the second quarter. Source
  • Interest and G&A expenses decreased: Interest expense and warehouse line fees were $402,690 thousand, down from $417,868 thousand; general and administrative costs were $237,092 thousand, down from $239,575 thousand. Source
  • Compensation and transaction costs rose: Compensation and benefits were $299,073 thousand, up from $294,407 thousand; non-capitalized transaction-related expenses were $11,735 thousand, up from $2,536 thousand. Source

Capital, dividends and balance sheet

  • Total assets and equity increased: Total assets were $47,165,394 thousand at September 30, 2025, up from $44,315,953 thousand; total stockholders’ equity was $8,612,685 thousand, up from $8,059,209 thousand. Source
  • Common shares outstanding increased: Common shares outstanding were 554,196,670, up from 530,292,171; preferred shares outstanding were 57,564,122, up from 49,964,122. Source
  • Secured financing agreements increased: Secured financing agreements were $16,538,685 thousand, up from $15,897,778 thousand at June 30, 2025. Source
  • Common dividend held at $0.25: The common dividend was $0.25 per share, totaling $138.5 million, against $132.6 million in the second quarter; dividends on preferred stock were $27,876 thousand. Source

Strategy and pending acquisitions

  • Paramount acquisition for about $1.6 billion: Rithm agreed to buy Paramount Group, Inc., an owner and operator of Class A office properties in New York and San Francisco, for about $1.6 billion in cash. Source
  • Owner-operator model described by management: Management described the company as an owner-operator model able to source, finance and actively manage debt and equity investments through subsidiaries such as Newrez, Genesis Capital and Sculptor. Source
  • Crestline and Paramount widen platform: Management said Crestline and Sculptor together deliver comprehensive product solutions, and Paramount significantly enhances commercial real estate expertise. Source

Coming up, as management said on 30 October 2025

  • Crestline closing targeted for Q4 2025: Management said closing is targeted for Q4 2025, subject to customary closing conditions and approvals. Source
  • Paramount closing requires stockholder approval: Management said closing is targeted for Q4 2025, subject to customary closing conditions, including approval of Paramount’s common stockholders. Source

Risks management discussed

  • Financial: Management noted that certain realized and unrealized losses, part of recurring operations, are subject to significant variability and are excluded from earnings available for distribution. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.