Core Viewpoint - Apollo Commercial Finance (ARI) reported quarterly earnings of $0.24 per share, missing the Zacks Consensus Estimate of $0.25 per share, and down from $0.35 per share a year ago, indicating a -4% earnings surprise [1][2] Financial Performance - The company posted revenues of $39.49 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 11.53%, and down from $56.68 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times [2] Stock Performance - Apollo Commercial Finance shares have increased by approximately 5% since the beginning of the year, contrasting with the S&P 500's decline of -8.6% [3] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.27 on revenues of $44.75 million, and for the current fiscal year, it is $0.98 on revenues of $178.98 million [7] - The estimate revisions trend for Apollo Commercial Finance is currently favorable, resulting in a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The REIT and Equity Trust industry is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]

Financial Performance - For the three months ended March 31, 2025, net income available to common stockholders was $22.9 million, compared to a net loss of $107.6 million for the same period in 2024[214]. - The net income before taxes was $26.1 million for the three months ended March 31, 2025, compared to a net loss of $104.4 million for the same period in 2024[222]. - Distributable Earnings for the three months ended March 31, 2025, were $33.2 million, or $0.24 per share, compared to $50.5 million, or $0.35 per share, for the same period in 2024[241]. - Dividends declared for common stock were $0.25 per share for the three months ended March 31, 2025, down from $0.35 per share in the same period of 2024[279]. Revenue and Income Sources - Revenue from real estate owned operations increased by $2.5 million to $26.3 million for the three months ended March 31, 2025, compared to $23.9 million for the same period in 2024[222]. - Interest income from commercial mortgage loans decreased by $39.7 million to $144.0 million for the three months ended March 31, 2025, compared to $183.7 million for the same period in 2024[222]. - Net income related to real estate owned increased by $3.8 million for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to higher occupancy levels at the D.C. hotel and increased net income from the Atlanta Hotel[224]. Expenses and Allowances - Net interest income decreased by $4.0 million to $39.5 million for the three months ended March 31, 2025, primarily due to lower average index rates and a lower average loan balance[216]. - Total operating expenses decreased by $1.6 million to $15.2 million for the three months ended March 31, 2025, compared to $16.8 million for the same period in 2024[222]. - The General CECL Allowance increased by $4.0 million during the three months ended March 31, 2025, driven by a more adverse macroeconomic outlook[218]. - The General CECL Allowance increased by $4.0 million during the three months ended March 31, 2025, driven by a more adverse macroeconomic outlook and loan originations[231]. Loan Portfolio and Commitments - During the three months ended March 31, 2025, the company committed $650.2 million to new loans, with $460.5 million funded at closing[248]. - The company received $93.4 million in loan repayments and sales during the same period[248]. - As of March 31, 2025, the total carrying value of the loan portfolio is $7,687,086, with commercial mortgage loans at $7,285,022 and subordinate loans at $402,064[254][262]. - The total unfunded commitment for the commercial mortgage loan portfolio is $989 million[256]. - As of March 31, 2025, the company had $989.2 million in unfunded loan commitments, with an expectation to fund approximately $592.9 million to existing borrowers in the short term[269]. Debt and Equity - The debt-to-equity ratio increased to 3.5 as of March 31, 2025, compared to 3.2 at December 31, 2024[266]. - The company has current debt obligations totaling $1.3 billion in corporate debt, $5.2 billion in secured debt arrangements, and $348.2 million related to real estate owned[268]. - Total borrowings as of March 31, 2025, amounted to $6.84 billion, an increase from $6.41 billion as of December 31, 2024[273]. - The company has policies in place to manage leverage and may seek to raise additional equity or debt capital for future investments[271]. Asset Management and Risk - The company maintains a strong relationship with borrowers and actively manages assets through continuous performance assessments[260]. - The company focuses on acquiring high credit quality assets to keep credit losses and financing costs low, but remains subject to varying degrees of credit risk[300]. - Interest rate risk is influenced by fiscal and monetary policies, with a hypothetical impact on net interest income estimated for a 50 basis point change in interest rates[302]. - For a 50 basis point increase in interest rates, the total net interest income could increase by $5,370, while a decrease could lead to a reduction of $3,224[302]. - Prepayment risk is managed by including prepayment penalties in loan agreements to mitigate unexpected principal repayments[305]. - Currency risk is mitigated through foreign currency forward contracts that match the net principal and interest of foreign currency loans[308]. Valuation and Financial Reporting - A valuation allowance of $0.7 million was recorded for a commercial mortgage loan held for sale, reflecting a selling price of 99.5%[227]. - The fair value of underlying collateral is sensitive to valuation methodology and key unobservable inputs, impacting the Specific CECL Allowance[296]. - The company prepares financial statements in accordance with GAAP and distributes at least 90% of REIT taxable income to maintain REIT qualification[307].

Core Viewpoint - Apollo Commercial Real Estate Finance, Inc. reported a net income of $0.16 per diluted share and distributable earnings of $0.24 per diluted share for the first quarter of 2025, reflecting the impact of elevated repayments and capital deployment of $650 million [1][2]. Financial Performance - Net income attributable to common stockholders per diluted share was $0.16 for the quarter ended March 31, 2025 [1]. - Distributable Earnings per diluted share was $0.24 for the same period, which is a non-GAAP financial measure [1][4]. - The Company recorded no realized losses in the consolidated statement of operations during the three months ended March 31, 2025 [7]. Capital Deployment - The Company deployed $650 million in capital during the first quarter of 2025, focusing on redeploying capital into newly originated loans [2]. Dividend Policy - As a REIT, the Company is required to distribute at least 90% of its taxable income annually, and it intends to pay dividends in an amount equal to its net taxable income over time, subject to board authorization [5]. Company Overview - Apollo Commercial Real Estate Finance, Inc. is a real estate investment trust that primarily originates, acquires, invests in, and manages performing commercial first mortgage loans and related debt investments [10]. - The Company is externally managed by ACREFI Management, LLC, a subsidiary of Apollo Global Management, which had approximately $751 billion in assets under management as of December 31, 2024 [10].

Core Viewpoint - Apollo Commercial Real Estate Finance, Inc. (ARI) will hold a conference call on April 25, 2025, to discuss its first quarter 2025 financial results, which will be released on April 24, 2025, after market close [1] Company Overview - Apollo Commercial Real Estate Finance, Inc. is a real estate investment trust that focuses on originating, acquiring, investing in, and managing performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments [3] - The company is externally managed and advised by ACREFI Management, LLC, which is an indirect subsidiary of Apollo Global Management, Inc., a global alternative asset manager with approximately $751 billion in assets under management as of December 31, 2024 [3] Conference Call Details - The conference call will include a review of the first quarter 2025 performance, discussions on recent events, and a question-and-answer session [1] - Registration for the call can be completed through a provided link, and a live webcast will also be available on the company's website [2] - A replay of the webcast will be posted approximately two hours after the call for those unable to attend live [2] Additional Information - Further details can be found on the company's website at www.apollocref.com [4]

Group 1 - Apollo Commercial Finance (ARI) shares increased by 7.3% to $8.56, following a significant trading volume, contrasting with an 18.5% loss over the past four weeks [1] - The stock price surge is attributed to a broader market rally due to optimism from Trump's announcement of a 90-day pause on reciprocal tariffs for most trading partners, which is expected to ease cost pressures and improve profitability for mREITs [2] - The upcoming quarterly earnings for Apollo Commercial Finance are projected at $0.22 per share, reflecting a year-over-year decline of 37.1%, with revenues expected to be $42.77 million, down 24.6% from the previous year [3] Group 2 - The consensus EPS estimate for Apollo Commercial Finance has remained unchanged over the last 30 days, indicating that stock price increases may not be sustainable without earnings estimate revisions [4] - Apollo Commercial Finance is categorized under the Zacks REIT and Equity Trust industry, with a current Zacks Rank of 3 (Hold) [4] - Blackstone Mortgage Trust (BXMT), another company in the same industry, saw a 6.6% increase in its stock price, closing at $18.31, but has returned -15.1% over the past month [4]

Group 1 - The average career length for a professional boxer is 16 years, highlighting the transient nature of success in the sport [1] - Famous boxers are typically recognized for their exceptional skills and winning records, indicating that performance is a key factor in achieving fame [1] Group 2 - The investment strategy promoted focuses on creating a portfolio that generates income without the need for selling assets, appealing to those seeking financial independence [2] - The Income Method claims to generate strong returns, targeting a yield of 9-10%, which positions it as an attractive option for retirement investing [2] - A month-long paid trial is offered for $49, with an additional 5% discount, suggesting a promotional effort to attract new investors [2]

Core Viewpoint - Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) has shown improvement in pay-out metrics for two consecutive quarters following a 29% dividend cut in the September quarter [1] Group 1: Company Performance - The mortgage real estate investment trust (REIT) reduced its dividend significantly, which has led to improved financial metrics in subsequent quarters [1]

Financial Data and Key Metrics Changes - The company reported distributable earnings of $45 million or $0.32 per share for Q4 2024, and $190 million or $1.33 per share for the full year [12][13] - GAAP net loss available to stockholders was negative $132 million or negative $0.97 per share for the full year [13] - The dividend was well covered with 128% coverage for the quarter and 111% for the full year [13] - The loan portfolio ended the year with a carrying value of $7.1 billion and a weighted average unlevered yield of 8.1% [14] Business Line Data and Key Metrics Changes - ARI originated $702 million worth of new loans in Q4 2024, bringing total origination volume for the year to $1.9 billion [5][6] - The loan portfolio comprised 46 loans totaling $7.1 billion at year-end, with no additional asset-specific CECL allowances recorded in Q4 [8][17] - Elevated loan repayments totaled $830 million in Q4, outpacing new loan closings and add-on fundings [16] Market Data and Key Metrics Changes - More than half of ARI's originations in 2024 were in the UK, highlighting the company's strong market position in Europe [7] - The weighted average risk rating of the portfolio remained at 3.0%, unchanged from the previous quarter [17] Company Strategy and Development Direction - The company expects increasing capital deployment and transaction activity in 2025 as participants reenter the market [5] - ARI is focused on proactive asset management and targeting resolutions on nonperforming loans to maximize value recovery [9][10] - The company is exploring opportunities in various sectors, including multifamily, senior housing, and data centers, with a focus on newly constructed assets [34][36] Management's Comments on Operating Environment and Future Outlook - Management noted that property valuations likely troughed in early 2024, with expectations for increased investment activity in 2025 [5] - The company anticipates that quarterly earnings in 2025 will be lower compared to Q4 2024, but still sufficient to cover dividends [14] - Management expressed optimism about recapturing capital tied up in underperforming assets and redeploying it into performing loans [26][28] Other Important Information - The company ended the quarter with over $380 million in total liquidity [20] - The total CECL allowance was relatively flat at $379 million, representing $2.74 per share of book value [18] Q&A Session Summary Question: What is the expected cadence of realized losses from the specific reserve? - Management indicated optimism about clawing back capital tied to specific projects, with potential opportunities to redeploy capital in the latter half of the year [25][26] Question: Where are the interesting geographical opportunities? - Management noted increased activity across all sectors and geographies, particularly in newly constructed multifamily and senior housing [34][36] Question: Is the portfolio expected to grow to $7.5 to $8 billion? - Management confirmed that with a large pipeline of deals, the portfolio could grow significantly in the next six to twelve months [46][48] Question: Are borrowers looking to extend loans into a more favorable rate environment? - Management observed that borrowers have more visibility and are making informed decisions about their portfolios, particularly in the office sector [62][64] Question: What are the spreads on stabilized versus transitional assets? - Management indicated that while spreads have tightened, they can still generate mid-teen returns on both stable and transitional assets [70][72]

Financial Performance - Net loss available to common stockholders for 2024 was $132 million, or $0.97 per diluted share, while Q4 reported net income of $38 million, or $0.27 per diluted share [9]. - Distributable Earnings for 2024 totaled $190 million, or $1.33 per diluted share, with Q4 Distributable Earnings at $45 million, or $0.32 per diluted share [9]. - Total net revenue for the year ended December 31, 2024, was $303,671, down from $336,824 in 2023, reflecting a decline of 9.8% [52]. - Net income available to common stockholders for Q4 2024 was $37,584, a decrease of 13.5% compared to $43,472 in Q4 2023 [52]. - The company reported a net loss of $119,636 for the year ended December 31, 2024, compared to a net income of $46,540 in 2023 [52]. - Distributable earnings for Q4 2024 were $44,748, down from $51,571 in Q4 2023, indicating a decline of 13.5% [53]. Dividends - Declared common stock dividends of $1.20 per share in 2024, resulting in a dividend yield of 13.2% and an annual dividend coverage ratio of 1.1x [9]. - The dividend declared per share of common stock for Q4 2024 was $0.25, down from $0.35 in Q4 2023 [52]. Loan Portfolio - Total loan portfolio reached $7.1 billion with a weighted-average unlevered all-in yield of 8.1%, consisting of 95% first mortgages and 95% floating rate loans [9]. - Committed $1.9 billion to new loans in 2024, with $782 million committed in Q4, and loan repayments amounted to $2.5 billion for the year [9]. - The total senior loan portfolio amounts to $7,176 million, with $841 million in unfunded commitments and a weighted average maturity of 2.5 years [35]. - The office loan segment totals $1,650 million, with $264 million in unfunded commitments, primarily located in London, UK, and Manhattan, NY [30]. - The hotel loan segment totals $1,577 million, with $31 million in unfunded commitments, including properties in various locations across Europe and the US [31]. - The residential loan segment totals $1,166 million, with $11 million in unfunded commitments, primarily in the UK and US [31]. - The retail loan segment totals $911 million, with $403 million in unfunded commitments, including properties in London, UK, and Manhattan, NY [31]. - The mixed-use loan segment totals $363 million, with $24 million in unfunded commitments, primarily located in London, UK, and Brooklyn, NY [33]. - The industrial loan segment totals $355 million, with $94 million in unfunded commitments, including properties in Sweden and the UK [33]. - The weighted average loan-to-value ratio for the loan portfolio was 57% [23]. Assets and Liabilities - Total assets as of December 31, 2024, amounted to $8,411,591, with cash and cash equivalents at $317,396 [51]. - The company’s total liabilities as of December 31, 2024, were $6,537,110, with secured debt arrangements at $4,814,973 [51]. - Ended 2024 with total common equity book value of $1.8 billion and total liquidity of $381 million, with no corporate debt maturities until May 2026 [9]. Financial Ratios - The company has a debt-to-equity ratio of 3.2x and a fixed charge coverage ratio of 1.3x, indicating a conservative capital management strategy [38]. - The weighted-average diluted shares for distributable earnings were 140,630,572 for Q4 2024, compared to 144,188,529 in Q4 2023 [53]. Foreign Exchange and Interest Income - The foreign exchange risk is mitigated through local currency-denominated secured debt and forward currency contracts, resulting in a $6.2 million realized gain in Q4 2024 [42]. - Net interest income for Q4 2024 was $43,503, a decrease of 25.1% from $58,007 in Q4 2023 [52]. - Operating expenses for Q4 2024 totaled $38,493, slightly higher than $37,805 in Q4 2023, representing an increase of 1.8% [52].

Apollo Commerical Finance (ARI) reported $43.5 million in revenue for the quarter ended December 2024, representing a year-over-year decline of 25%. EPS of $0.32 for the same period compares to $0.36 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $43.63 million, representing a surprise of -0.28%. The company delivered an EPS surprise of +39.13%, with the consensus EPS estimate being $0.23.While investors scrutinize revenue and earnings changes year-over-year and how they compare ...