Financial Data and Key Metrics Changes - The company generated approximately $300 million in earnings for shareholders, achieving an 18% return on equity (ROE) [4] - GAAP net income was reported at $193.7 million, or $0.35 per diluted share, with an 11% ROE [14] - Earnings available for distribution (EAD) was $297 million, or $0.54 per diluted share, marking the 24th consecutive quarter where EAD exceeded dividends paid [14] - The book value at the end of the quarter was $12.83, totaling $7.1 billion [14] - Cash and liquidity on the balance sheet stood at $2.2 billion [14] Business Line Data and Key Metrics Changes - Genesis Capital originated $1.2 billion in loans during the quarter, a 60% increase year over year [16] - The mortgage company, Newrez, reported a pre-tax income of approximately $295 million, up 7% quarter over quarter and 20% year over year, with a 20% ROE [33] - Direct origination production for Newrez increased by 32% year over year [34] - The servicing business generated $260 million in pre-tax income, an 11% increase year over year [36] Market Data and Key Metrics Changes - The company ended the quarter with a balance sheet of $47 billion, with Sculptor managing $37 billion in assets under management (AUM), Crestline with $18 billion, and Paramount with a $7 billion portfolio [10] - The demand for office space in New York is over 90% leased, while San Francisco is in the low 70% range, indicating a recovery in demand [8][28] Company Strategy and Development Direction - The company announced two acquisitions: Crestline, a credit manager, and Paramount, a Class A office REIT, to expand its product offerings without raising equity in capital markets [5][7] - The focus remains on performance rather than assets under management (AUM), aiming to provide fewer managers with more products to limited partners (LPs) [6] - The company is exploring opportunities in the energy space and plans to close its first Evergreen ABF fund on a leading wealth management platform [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position, highlighting strong earnings and the potential for growth through acquisitions and product offerings [10][90] - The company aims to drive more fee-related earnings (FRE) to enhance its valuation and is focused on growing its asset management business [42][44] - Management acknowledged the competitive landscape but emphasized their disciplined approach to underwriting and servicing, which differentiates them from peers [66] Other Important Information - The company is now involved in the insurance and reinsurance business, which it intends to grow over time [25] - The average rent for the Paramount portfolio is approximately $85 per foot, with significant potential for rent increases [8] Q&A Session Summary Question: Update on broader strategic vision and timelines - Management believes the company is fundamentally attractive from a value standpoint and is focused on growing asset management business to drive revaluation [41][42] Question: Update on third-party capital for Paramount transaction - The company expects to raise approximately $950 million to $1 billion from third parties, with $300 million to $500 million from Rithm [45][46] Question: Options for growing Rithm Capital - Management is exploring direct lending options and may consider share buybacks if growth does not materialize [55][56] Question: Discussion on Ginnie Mae streamlined refinances - These loans are cheaper to produce, impacting the gain on sale margin [51][54] Question: Share buybacks as a tool for valuation - Management indicated that the focus will be on continued growth rather than share buybacks, especially given the recent acquisitions [80] Question: Fundraising outlook for Sculptor - Management is optimistic about sustaining the fundraising pace into 2026, with significant investments planned in capital formation [82][84]

Financial Performance - Rithm Capital reported GAAP Net Income of $193.7 million, or $0.35 per diluted share, with an 11% Return on Equity[21] - Earnings Available for Distribution (EAD) reached $296.9 million, or $0.54 per diluted share, resulting in an 18% Return on Equity[21] - The company's book value stood at $7.1 billion, or $12.83 per common share[21] - Cash and liquidity amounted to $2.2 billion[21] Strategic Acquisitions - Rithm Capital entered into a definitive agreement to acquire Crestline Management, L P, with approximately $18 billion in AUM, on September 3, 2025[67] - A definitive agreement was also reached to acquire Paramount Group, Inc on September 17, 2025[26] - Rithm expects to have $1.3 billion of cash & cash equivalents after closing the Crestline and Paramount transactions[35] Business Segment Highlights - Genesis Capital's Q3 2025 origination volume reached $1.2 billion, representing a 60% year-over-year increase[27,99] - Newrez platform delivered 20% ROE in Q3'25, excluding MSR MTM and related hedge adjustment of ($61.0) million[117,124] - Sculptor had $1.4 billion of gross inflows in Q3'25, bringing Sculptor's AUM to $37 billion[33] - The total servicing portfolio for Newrez is $878 billion UPB[11]

Financial Performance - GAAP net income for Q3 2025 was $193.7 million, or $0.35 per diluted common share, down from $283.9 million, or $0.53 per diluted common share in Q2 2025[3] - Earnings available for distribution increased to $296.9 million, or $0.54 per diluted common share, consistent with Q2 2025[4] - Common dividend declared was $138.5 million, or $0.25 per common share, compared to $132.6 million in Q2 2025[3] - Net income attributable to common stockholders for the three months ended September 30, 2025, was $193,662 thousand, down from $283,899 thousand for the previous quarter, reflecting a decrease of approximately 31.8%[21] - The net income per diluted share decreased to $0.35 for the three months ended September 30, 2025, compared to $0.53 for the previous quarter[21] - Total Revenues for Q3 2025 reached $1,105,523,000, an increase from $1,217,039,000 in Q2 2025[22] - Interest income for Q3 2025 was $453,786,000, compared to $478,455,000 in Q2 2025, indicating a decline of about 5.2%[22] - Servicing revenue, net for Q3 2025 was $314,930,000, while in Q2 2025 it was $419,812,000, showing a decrease of approximately 25%[22] - Total Operating Expenses for Q3 2025 were $938,855,000, an increase from $951,850,000 in Q2 2025[22] Asset Management and Growth - Newrez LLC reported pre-tax income of $295.1 million in Q3 2025, up from $275.1 million in Q2 2025, with a 20% pre-tax return on equity on $6.2 billion of equity[7] - Rithm Capital's residential transitional lending platform, Genesis Capital, achieved origination volume of $1.2 billion in Q3 2025, a 60% increase year-over-year[7] - Sculptor Capital Management's assets under management grew to approximately $37 billion as of September 30, 2025, with gross fundraising inflows of $1.4 billion during the quarter[7] - Rithm Capital entered into a definitive agreement to acquire Crestline Management, L.P., which has $18 billion in assets under management, targeting a Q4 2025 closing[7] - The company also agreed to acquire Paramount Group, Inc. for approximately $1.6 billion in cash, with closing targeted for Q4 2025[7] - Total servicing unpaid principal balance reached $878 billion, a 7% year-over-year increase, including $282 billion from third-party servicing, which grew by 21% year-over-year[7] - Origination funded production volume was $16.4 billion in Q3 2025, reflecting a 3% year-over-year increase[7] Balance Sheet and Equity - Total assets increased to $47,165,394 thousand as of September 30, 2025, up from $44,315,953 thousand on June 30, 2025, representing a growth of approximately 6.5%[15] - Cash and cash equivalents increased to $1,610,958 thousand as of September 30, 2025, from $1,600,948 thousand as of June 30, 2025[15] - Total liabilities rose to $38,255,920 thousand as of September 30, 2025, compared to $35,995,781 thousand on June 30, 2025, indicating an increase of approximately 6.3%[15] - The company’s secured financing agreements increased to $16,538,685 thousand as of September 30, 2025, up from $15,897,778 thousand in the previous quarter[15] - Stockholders' equity increased to $8,612,685 thousand as of September 30, 2025, compared to $8,059,209 thousand as of June 30, 2025, reflecting an increase of approximately 6.9%[15] - Stockholders' Equity in Rithm Capital Corp. as of September 30, 2025, was $8,498,517,000, compared to $7,948,383,000 at the end of Q2 2025[22] Market Position and Strategy - The company has a diversified investment platform that includes residential and commercial lending, MSRs, and structured credit, enhancing its market position[25] - Rithm Capital emphasizes an owner-operator model through its subsidiaries, aiming to drive value for shareholders and fund investors[25] - The company reported a net realized and unrealized gain of $44,364 thousand for the three months ended September 30, 2025, compared to a loss of $16,931 thousand in the previous quarter[21] - The company reported a change in fair value of MSRs and MSR financing receivables of $(264,351,000) in Q3 2025, compared to $(155,005,000) in Q2 2025[22]

Core Insights - Rithm Capital Corp. reported significant progress in its strategic initiatives during the third quarter ended September 30, 2025, highlighting the importance of acquisitions and platform expansion [1] Financial Performance - The company emphasized a disciplined investment approach as a key driver for building a diversified asset management platform [1]

Group 1 - Rithm Capital plans to acquire Paramount Group, which has a significant presence in New York and San Francisco [1]

Core Insights - Rithm (RITM) is expected to report quarterly earnings of $0.54 per share, unchanged from the previous year, with revenues projected at $1 billion, reflecting a 61.5% year-over-year increase [1] - The consensus EPS estimate has been adjusted downward by 0.3% over the past 30 days, indicating a reassessment by analysts [1][2] Revenue Estimates - Analysts project 'Revenues- Interest income' at $485.25 million, showing a year-over-year decline of 11.9% [4] - 'Revenues- Other revenues' are estimated to reach $30.99 million, indicating a significant decrease of 45.8% year over year [4] - 'Revenues- Asset management' is expected to be $92.22 million, reflecting a year-over-year increase of 13.8% [4] - The consensus for 'Revenues- Gain on originated residential mortgage loans, held-for-sale, net' stands at $207.43 million, suggesting a year-over-year increase of 12.3% [5] Stock Performance - Rithm shares have experienced a decline of 5% over the past month, contrasting with the Zacks S&P 500 composite's increase of 3.6% [5] - Rithm holds a Zacks Rank 2 (Buy), indicating expectations to outperform the overall market in the near future [5]

Core Insights - Rithm Capital Corp. (RITM) is scheduled to report its third-quarter 2025 results on October 30, 2025, with earnings estimated at 54 cents per share and revenues of $1 billion [1][5]. Earnings Estimates - The earnings estimate for the third quarter has increased by 2 cents over the past 60 days, remaining consistent with the previous year's level [2]. - The Zacks Consensus Estimate for quarterly revenues indicates a significant year-over-year increase of 61.5% [2]. Full-Year Projections - For the full year 2025, the revenue estimate for Rithm Capital is projected at $4.3 billion, reflecting a year-over-year decrease of 17.9% [3]. - The consensus estimate for the current year's EPS is $2.15, suggesting a modest growth of 2.4% year-over-year [3]. Recent Performance - Rithm Capital has consistently beaten consensus estimates in the last four quarters, with an average surprise of 20.1% [3]. Earnings Prediction Model - The current model does not predict a definitive earnings beat for RITM, as it has an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy) [4]. Revenue Breakdown - The consensus estimate for asset management revenues is $92.2 million, representing a year-over-year increase of 13.8% [5]. - Net servicing revenues are expected to reach $413.9 million, indicating substantial improvement from the previous year [5][6]. Cost Considerations - Increased general and administrative costs, along with lower interest income, may pressure overall profitability [5][7]. - The Zacks Consensus Estimate for interest income shows an anticipated decline of 11.9% year-over-year [7]. Strategic Factors - The profitability of Rithm Capital's Newrez business is expected to positively impact its Origination & Servicing segment [6]. - Strategic partnerships and a diversified platform are anticipated to support third-quarter results [6]. Comparison with Peers - While an earnings beat for Rithm Capital appears uncertain, other companies in the finance sector, such as Franklin Resources, Ameriprise Financial, and Brookfield Corporation, show potential for earnings beats based on their respective Earnings ESPs and Zacks Ranks [8][9][10][11].

Company Performance - Rithm (RITM) closed at $10.77, with a daily increase of +1.13%, underperforming the S&P 500's gain of 1.56% [1] - The stock has decreased by 13.97% over the past month, contrasting with the Finance sector's loss of 2.31% and the S&P 500's gain of 0.41% [1] Upcoming Earnings - The upcoming earnings release is anticipated, with projected earnings per share (EPS) of $0.54, indicating no change from the same quarter last year [2] - Revenue is estimated at $1 billion, reflecting a significant increase of 61.46% compared to the equivalent quarter last year [2] Annual Estimates - For the annual period, earnings are expected to be $2.15 per share, showing a +2.38% change from the previous year, while revenue is projected at $4.3 billion, indicating a decrease of -17.89% [3] Analyst Sentiment - Recent adjustments to analyst estimates are crucial, as positive revisions suggest optimism regarding the company's business and profitability [3][4] - The Zacks Consensus EPS estimate has increased by 1.34% over the past month, positioning Rithm with a Zacks Rank of 2 (Buy) [5] Valuation Metrics - Rithm is currently trading at a Forward P/E ratio of 4.97, significantly lower than the industry average of 11.98, suggesting it is trading at a discount [6] - The Financial - Miscellaneous Services industry, part of the Finance sector, holds a Zacks Industry Rank of 91, placing it in the top 37% of over 250 industries [6]

Core Viewpoint - Rithm (RITM) has experienced a significant decline of 12.4% over the past four weeks, but it is now in oversold territory, indicating a potential for a trend reversal as analysts expect better earnings than previously predicted [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a momentum oscillator that indicates whether a stock is oversold, with readings below 30 typically signaling this condition [2] - RITM's current RSI reading is 24.6, suggesting that the heavy selling pressure may be exhausting, which could lead to a price rebound [5] Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts that RITM's earnings estimates for the current year have increased by 1.3% over the last 30 days, which often correlates with near-term price appreciation [7] - RITM holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8]

Core Viewpoint - KBRA has assigned preliminary ratings to eight classes of mortgage-backed notes from New Residential Mortgage Loan Trust 2025-NQM5, a $500.9 million non-prime RMBS transaction sponsored by Rithm Capital Corp [1] Group 1: Transaction Details - The total size of the transaction is $500.9 million [1] - The transaction is categorized as a non-prime RMBS [1] - Rithm Capital Corp, formerly known as New Residential Investment Corp, is the sponsor of the transaction [1] Group 2: Underlying Mortgages - The underlying mortgages in the pool were primarily originated by Champions Funding, LLC (31.9%), NewRez LLC (24.8%), and Home Express [1]