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• Earnings Available for Distribution (EAD): $0.52 per diluted share, marking the 22nd consecutive quarter where EAD exceeded common dividends paid.

• GAAP Net Income: $36.5 million or $0.07 per diluted share, with a 2% return on equity.

• Book Value: $6.6 billion at the end of the quarter, with a book value per share of $12.39.

• Common Stock Dividend: $0.25 per common share, yielding an 8.7% dividend yield.

• Cash and Liquidity: $1.9 billion at the end of Q1.

• Genesis Capital Production: Nearly $1 billion, with a 7% year-over-year increase.

• Sculptor Asset Management AUM: $35 billion, with $1.4 billion of gross inflows in the quarter.

• Newrez Servicing Portfolio: Approximately $850 billion, including third-party servicing.

• Newrez Funded Volume: $11.8 billion, with a 9% increase in funded volume year-over-year.

• Newrez Pretax Income: $270 million, excluding mark-to-market, up 14% year-over-year.

• Third-Party Servicing Clients: Added four new clients in the first quarter.

• Owned MSR Performance: 60-day delinquencies down 30 basis points to 3.1%.

• Warning! GuruFocus has detected 1 Warning Sign with RITM.

Release Date: April 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rithm Capital Corp (NYSE:RITM) reported a strong quarter with earnings available for distribution at $0.52 per diluted share, representing a 17% return on equity.

• The company continues to see growth in its asset management business, with Sculptor's real estate fund reaching commitments of $3.2 billion, the largest in its history.

• Rithm Capital Corp (NYSE:RITM) is the third largest mortgage servicer and fifth largest mortgage originator in the United States, showcasing its strong market position.

• The company has a diversified portfolio with funds in real estate, credit, energy, and infrastructure, providing a broad base for growth.

• Rithm Capital Corp (NYSE:RITM) maintains a strong liquidity position with $1.9 billion in cash and liquidity at the end of Q1 2025.

Negative Points

• Rithm Capital Corp (NYSE:RITM) believes its equity is severely undervalued, trading at 83% of book value, which is a concern for management.

• The company faces margin compression in its origination business due to increased competition and lower expected origination volumes.

• Market volatility, particularly in the MSR business, has led to mark-to-market volatility affecting GAAP net income.

• Despite strong performance, the company is challenged by the need to unlock shareholder value and improve its market valuation.

• The company is experiencing increased competition in the mortgage origination market, impacting its ability to grow market share without compromising on pricing discipline.