Onity Group Inc.(ONIT) - 2025 Q3 - Quarterly Results

Financial Performance - Net income attributable to common stockholders was $18 million, with diluted EPS of $2.03 and ROE of 14%[7] - Net income attributable to common stockholders for Q3'25 was $18 million, a decrease of 14.3% from $21 million in Q3'24[23] - Total revenue for Q3'25 increased to $280.3 million, up 5.8% from $265.7 million in Q3'24[26] - Adjusted pre-tax income was $31 million, resulting in an annualized adjusted ROE of 25%[7] - Adjusted pre-tax income for Q3'25 was $31 million, consistent with Q3'24, despite notable items impacting earnings[24] - The company reported a GAAP return on equity (ROE) of 14% for Q3'25, down from 19% in Q3'24[24] - Basic earnings per share (EPS) for Q3'25 was $2.19, down from $2.72 in Q3'24[26] Originations and Servicing - Originations volume reached $12 billion, up 39% year-over-year, exceeding the industry growth rate[7] - Average servicing UPB increased to $312 billion, up $7 billion year-over-year[7] - Funded recapture volume increased 1.8 times year-over-year, with a refinance recapture rate of 1.9 times the industry average[8] - Nine new subservicing clients were added year-to-date[8] - Mortgage servicing rights (MSRs) at fair value rose to $2,762.9 million in Q3'25, compared to $2,223.6 million in Q3'24, reflecting a significant increase of 24.2%[25] Liquidity and Assets - Total liquidity stood at $221 million as of September 30, 2025[8] - Cash and cash equivalents decreased to $172.8 million in Q3'25 from $201.6 million in Q3'24, a decline of 14.3%[25] - Total assets as of September 30, 2025, were $16,107.4 million, an increase from $13,226.7 million in the previous year[25] Future Expectations - The company expects to exceed the 2025 adjusted ROE guidance range of 16% - 18%[7] - The company anticipates releasing a significant portion of the $180 million deferred tax asset valuation allowance by year-end 2025[7] - The company plans to recognize changes in fair value due to interest rates for reverse loan buyouts as notable items starting Q4'24, which may impact future earnings reporting[23] Subservicing Agreements - The Rithm subservicing agreements, representing approximately $33 billion or 10% of total servicing UPB, will not be renewed effective January 31, 2026[9] Valuation Adjustments - The company experienced a net loss of $45 million in MSR valuation adjustments for Q3'25, compared to a loss of $31.5 million in Q3'24[26]