Financial Data and Key Metrics Changes - Total revenues increased by 12% organically, with the US market growing by 16%, marking one of the strongest performances since 2021 [9][30] - Adjusted diluted EPS grew by 10% in the quarter, or 14% when excluding the impact from the tax rate reset [9] - Adjusted EBITDA increased by 10%, with an adjusted EBITDA margin of 35.6% [30] Business Line Data and Key Metrics Changes - In the U.S., financial services revenue grew by 19%, or 11% excluding mortgage, with double-digit growth in mortgage, consumer lending, and auto [10][31] - Emerging verticals accelerated from 7% growth in Q3 to 16% in Q4, with strong performance across insurance, media, tenant and employment screening, tech, retail, and e-commerce [10][32] - Credit solutions grew by 13%, driven by U.S. non-mortgage volumes, while marketing solutions saw a growth acceleration from flat in 2024 to 7% in 2025 [15][16] Market Data and Key Metrics Changes - Internationally, revenue grew by 2% on an organic constant currency basis, with Canada and the U.K. both achieving double-digit growth [11][34] - India experienced a revenue decline of 4% in Q4, attributed to a reset year for unsecured lending and credit card originations [11][37] - The U.K. business grew by 10%, and Canada grew by 13%, reflecting strong performance from banking and fintech customers [34] Company Strategy and Development Direction - The company aims to build on its momentum and drive innovation-led growth, with a focus on launching new AI-powered solutions [20][21] - The strategic focus for 2026 includes enhancing product predictiveness and capturing more value within customer workflows [20] - The company completed its transformation investment program, which is expected to yield full target savings in 2026 [19][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit revenue growth and double-digit adjusted EPS growth for 2026, assuming stable business conditions [19][55] - The company anticipates a gradual recovery in international markets and modest U.S. lending growth [19][42] - Management highlighted the importance of AI in driving growth and improving operational efficiency, positioning the company advantageously in the market [22][28] Other Important Information - The company repurchased approximately $150 million in shares during the quarter, totaling $300 million for 2025, and raised its quarterly dividend by 9% to $0.125 per share [9][40] - The acquisition of Monevo and majority ownership of TransUnion de México were completed, expanding the company's global reach [14][40] Q&A Session Questions and Answers Question: U.S. emerging vertical guidance - Management acknowledged strong growth in emerging verticals and emphasized a prudent conservative approach to guidance, setting the stage for potential outperformance [60][62] Question: Differentiation in marketing and fraud - Management highlighted the unique identity data assets and resolution capabilities that set the company apart from competitors, emphasizing the proprietary nature of their data [71][73]

Financial Data and Key Metrics Changes - Total revenues increased by 12% organically, with the U.S. market growing by 16%, marking one of the strongest performances since 2021 [9][30] - Adjusted diluted EPS grew by 10% in the quarter, or 14% when excluding the impact from the tax rate reset [9] - Adjusted EBITDA increased by 10%, with an adjusted EBITDA margin of 35.6% [30] Business Line Data and Key Metrics Changes - U.S. Financial Services revenue grew by 19%, or 11% excluding mortgage, with double-digit growth in Consumer Lending and Auto [10][31] - Emerging Verticals accelerated growth from 7% in Q3 to 16% in Q4, with double-digit growth across Insurance, Media, Tenant and Employment Screening, Tech, Retail, and E-commerce [10] - Credit Solutions grew by 13%, driven by U.S. non-mortgage volumes, while Marketing Solutions saw a growth acceleration from flat in 2024 to 7% in 2025 [15][16] Market Data and Key Metrics Changes - International revenue grew by 2% on an organic constant currency basis, with Canada and the U.K. both achieving double-digit growth [11][34] - India experienced a revenue decline of 4% in Q4, attributed to a reset year for unsecured lending and credit card originations [11][37] - Latin America declined by 3% due to softer economic conditions, while Asia Pacific saw an 11% decline [36] Company Strategy and Development Direction - The company aims to build on its momentum and drive innovation-led growth, with a focus on launching new AI-powered solutions [20][21] - The strategic focus for 2026 includes enhancing product predictiveness and capturing more value within customer workflows [20] - The company plans to expand its offerings in India, leveraging favorable economic and demographic trends [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit revenue growth and double-digit adjusted EPS growth for 2026, assuming stable business conditions [19][54] - The company anticipates a gradual recovery in international markets and modest U.S. lending growth [19][54] - Management highlighted the importance of AI in driving growth and improving internal processes, positioning the company advantageously in the market [22][28] Other Important Information - The company repurchased approximately $150 million in shares during Q4, totaling $300 million for 2025, and raised its quarterly dividend by 9% to $0.125 per share [9][41] - The acquisition of Monevo and majority ownership of TransUnion de México were highlighted as strategic moves to enhance growth [14][41] - The transformation investment program was completed on schedule and budget, expected to deliver significant cost savings and operational efficiencies [42][43] Q&A Session Summary Question: U.S. emerging vertical guidance - Management acknowledged strong growth in emerging verticals and emphasized a conservative approach to guidance, aiming for beats and raises throughout the year [60][62] Question: Differentiation in Marketing and Fraud - Management highlighted the proprietary identity data assets and resolution capabilities as key differentiators, emphasizing the challenges competitors face in accessing similar data [70][72]

Financial Data and Key Metrics Changes - Total revenues increased by 12% organically, with the US market growing by 16%, marking one of the strongest performances since 2021 [5][26] - Adjusted diluted EPS grew by 10% in the quarter, or 14% when excluding the impact from the tax rate reset [5][27] - Adjusted EBITDA increased by 10%, with an adjusted EBITDA margin of 35.6% [26][27] Business Line Data and Key Metrics Changes - U.S. financial services revenue grew by 19%, or 11% excluding mortgage, with mortgage revenue increasing by 37% [6][29] - Emerging verticals accelerated to 16% growth, up from 7% in the third quarter, with double-digit growth across various sectors including insurance and e-commerce [6][30] - Credit solutions grew by 13%, driven by U.S. non-mortgage volumes, while marketing solutions saw a growth of 7% [11][12] Market Data and Key Metrics Changes - International revenue grew by 2% on an organic constant currency basis, with Canada and the U.K. both achieving double-digit growth [7][31] - India experienced a decline of 4% in the quarter, attributed to a reset year for unsecured lending and credit card originations [7][33] - The U.S. markets are expected to see high single-digit growth, while international markets are anticipated to grow mid-single-digit [42] Company Strategy and Development Direction - The company aims to build on its momentum and drive innovation-led growth, with a focus on launching new AI-powered solutions [17][18] - The strategic focus for 2026 includes enhancing product predictiveness and capturing more value within customer workflows [17][18] - The company completed its transformation investment program, which is expected to yield full target savings in 2026 [16][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit revenue growth and double-digit adjusted EPS growth for 2026 [16][50] - The company anticipates a gradual recovery in international markets and modest U.S. lending growth [16][34] - Management highlighted the importance of AI in driving growth and improving operational efficiency [19][24] Other Important Information - The company repurchased approximately $150 million of shares in the fourth quarter, totaling $300 million for 2025 [5][37] - A quarterly dividend was raised by 9% to $0.125 per share, reflecting a commitment to returning capital to shareholders [5][37] - The acquisition of a majority ownership of TransUnion de México is expected to close in the first half of 2026 [37][38] Q&A Session Questions and Answers Question: Insights on U.S. emerging vertical guidance - Management acknowledged strong growth in emerging verticals and emphasized a conservative approach to guidance, aiming for beats and raises throughout the year [54][55] Question: Differentiation in marketing and fraud solutions - Management highlighted the proprietary identity data assets and resolution capabilities as key differentiators, emphasizing the extensive data sources and integrations that competitors may lack [65][66]

Financial Data and Key Metrics Changes - Total net revenues increased by 21% year over year to $18.8 million, driven by higher services revenues and growth in recurring subscription and support revenues [4][10] - Subscription and support revenues rose approximately 5.1% to $9.1 million, while service revenues increased by 40.9% to $9.6 million [10][11] - Gross profit was $9 million, representing 48% of net revenues, with cost of sales at $9.8 million or 52% of net revenues, reflecting improved margins [11][12] Business Line Data and Key Metrics Changes - Services revenues grew significantly, primarily from new implementations, indicating strong demand for the company's offerings [4][10] - Recurring subscription and support revenues increased by 7.2% to $18 million for the six months ended December 31, 2025, compared to the prior year [14][16] Market Data and Key Metrics Changes - Demand for digital automotive retail solutions remains strong, with new dealer groups and franchised dealerships signing on during the quarter [6][7] - The company secured a $50 million four-year contract extension with a tier one global auto captive, reinforcing customer trust and revenue visibility [6] Company Strategy and Development Direction - The company is focused on product innovation, including the launch of an AI-enabled credit decisioning engine, Check, aimed at modernizing credit underwriting [5][9] - There is a commitment to expanding the global footprint and enhancing solutions to meet evolving client needs, with an increased revenue growth guidance for fiscal 2026 to nearly $73 million [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capitalizing on market opportunities and emphasized the importance of long-term customer relationships supported by a strong pipeline [18] - The company acknowledged macroeconomic and currency dynamics as considerations but highlighted a diversified business model and resilient customer base as a solid foundation for future growth [18] Other Important Information - The company appointed Sardar Abubakr as Chief Financial Officer, enhancing the leadership team to support growth initiatives [7] - Cash and cash equivalents were reported at $18.1 million, indicating a solid liquidity position [16] Q&A Session Summary Question: About margin improvement expectations - Management anticipates improving margins in the coming quarters, driven by investments in growth strategies and new hires [22][24] Question: Inquiry about non-controlling interest computation - The company follows standard GAAP definitions for non-controlling interest, with profits from the Pakistani subsidiary allocated accordingly [35][38] Question: Consideration of stock buyback or dividend - Management is open to the idea of allocating cash for stock buybacks or dividends but will decide based on board discussions [39][41]

Financial Data and Key Metrics Changes - Fourth quarter sales were impacted by a quality event with the largest customer, but excluding this event, the company delivered strong financial results with 7% year-on-year organic growth [4][15] - Adjusted earnings per share for the quarter were $1.53, up 9% sequentially [15] - Adjusted EBITDA was $57 million, or 22.5% of Value-Added Sales, down 7% year-over-year but up 170 basis points from a margin perspective [16] Business Line Data and Key Metrics Changes - Electronic materials experienced a 20% increase in sales, driven by growth in the semiconductor market, marking the strongest sales quarter in nearly three years [7][17] - Precision optics delivered a 26% increase in sales, marking the third consecutive quarter of top-line improvement [8][18] - Performance materials saw Value-Added Sales of $132.4 million, down 32% year-over-year, primarily due to lower Precision Clad Strip sales [16] Market Data and Key Metrics Changes - The semiconductor business saw order rates up 6% year-on-year, with a 14% increase excluding China [9] - The new energy market experienced more than double sales year-on-year, supported by a multi-year supply agreement with Commonwealth Fusion Systems [10] - Defense sales surpassed $100 million for the second consecutive year, with 10% yearly growth since 2020 [10] Company Strategy and Development Direction - The company is focused on growth in the new energy market and has made significant investments to enhance its capacity, particularly in beryllium production [11][38] - The transformation of precision optics is expected to unlock additional growth and margin expansion opportunities [13] - The company anticipates continued progress toward a midterm EBITDA margin target of 23% supported by top-line growth and operational improvements [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence entering 2026, expecting approximately 15% earnings growth driven by new business wins and market recovery [11][22] - The company is addressing the quality event with corrective actions and enhanced quality control measures to minimize future risks [6][29] - Management highlighted the importance of strong partnerships with customers and the commitment to delivering high-quality products [6][14] Other Important Information - The company ended the quarter with a net debt position of approximately $445 million and $224 million of available capacity on its existing credit facility [21] - The first quarter of 2026 is expected to be slower due to normal seasonality and additional costs related to ramping up production [22][49] Q&A Session Summary Question: Details on the Precision Clad Strip quality issues and customer expectations - Management explained the quality event was due to a control failure in production, which was addressed with corrective actions and a revised quality system [27][28] Question: Electronic materials business performance and margin expectations - Management noted strong top-line growth in electronic materials but highlighted mixed factors affecting margin performance [31][34] Question: Beryllium capacity and strategic mineral reserves - Management confirmed a $65 million investment from a defense prime to expand beryllium capacity, with additional capacity expected by 2028 [11][38] Question: Working capital needs and inventory management - Management acknowledged increased working capital due to growth and acquisitions but emphasized ongoing initiatives to manage inventory efficiently [71][74] Question: Energy market contributions and order book dynamics - Management confirmed initial shipments to Commonwealth Fusion Systems and discussed the implications for future energy market contributions [85][87]

Financial Data and Key Metrics Changes - Core FFO per share for Q4 2025 was $0.32, and for the full year, it was $1.17, aligning with guidance [9] - Same-store NOI grew by 1.8% in Q4 and 2.4% for the full year, driven by a 2% increase in same-store revenue [9][10] - Operating expenses increased by 2.4% in Q4 and were modestly higher for the full year due to various factors, including higher repairs and maintenance [11] Business Line Data and Key Metrics Changes - The company renovated 2,003 units in 2025, achieving an average unlevered return on investment of 15.3% [6] - In 2026, the company plans to renovate between 2,000 and 2,500 units, adding six new communities to the Value-Add Program [7] Market Data and Key Metrics Changes - Job growth in the company's markets is forecasted to average 60 basis points, double the national average of 30 basis points [8] - The company generates nearly 70% of its NOI from communities in seven of the ten highest in-migration states, supporting apartment demand [8] Company Strategy and Development Direction - The company aims to capitalize on growth opportunities by focusing on operational efficiencies and cost savings through technology adoption [5] - Capital allocation will prioritize investments in the value-add program, with expectations of improved market fundamentals in 2026 [6][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026, citing improving market fundamentals and strong demand driven by job and population growth [23] - The company anticipates same-store NOI growth of 80 basis points in 2026, with a focus on maintaining operational stability [17][19] Other Important Information - The company sold a 356-unit community for $50 million and entered a new joint venture in Indianapolis for a 318-unit community [13] - A $350 million unsecured term loan was secured to improve liquidity and manage debt maturities [15] Q&A Session Summary Question: How does the new lease rate growth assumption incorporate market rent growth? - Management indicated that the new lease growth starts negative in January but is expected to improve throughout the year, with first-half growth down about 2.25% and second-half growth up roughly 75 basis points [25] Question: Can you discuss the performance of non-same-store properties? - Management noted that non-same-store properties are performing in line with expectations, but two development deals are behind schedule due to higher concessions [27] Question: What impact will concessions burning off have on rent growth projections? - Management expects lower concessions in the back half of the year, which should improve rental rate growth, particularly for renewals [32] Question: Can you elaborate on the performance of specific markets? - Management highlighted strong performance in markets like Atlanta and Nashville, while noting challenges in Memphis due to slower macro growth [40] Question: What is the strategy regarding fixed and floating rate debt? - Management plans to maintain a flexible approach, favoring floating rate debt in the current environment while monitoring interest rate markets closely [86]

Financial Data and Key Metrics Changes - The company achieved record sales, operating margin, and earnings per share for both Q4 and the full year 2025, with organic sales rising 8% and reported sales up 16% in Q4 [3][11] - Adjusted operating margin climbed 220 basis points to 19% in Q4, while for the full year, adjusted operating margin improved by 190 basis points to 19.6% [3][15] - Free cash flow reached a record $356 million for 2025, up 7%, with a conversion rate of 105% [4][16] Business Line Data and Key Metrics Changes - In the Americas, organic sales grew by 10% and reported growth was 17%, driven by favorable pricing and volume [11] - Europe saw organic sales rise by 1% and reported sales increase by 10%, benefiting from favorable pricing and foreign exchange effects [11] - APMEA experienced organic sales growth of 9%, with acquisitions contributing an additional 6% for a total reported sales growth of 15% [12] Market Data and Key Metrics Changes - The Americas region showed strong performance, while Europe faced challenges with a 5% decline in organic sales for the full year [14] - The company anticipates a mixed outlook for non-residential new construction in the Americas, with some growth expected in institutional and data center sectors, but weakness in offices and retail [7][17] - APMEA is projected to achieve organic growth between 4% and 8% [18] Company Strategy and Development Direction - The company continues to focus on strategic M&A, high-return organic investments, competitive dividends, and steady share buybacks [4] - The data center initiative is a key growth area, with an addressable market exceeding $1 billion and sales growing at a double-digit rate [9][10] - The company plans to phase out underperforming products, identifying $10-15 million in European sales and $25-30 million in the Americas to eliminate during 2026 [6] Management's Comments on Operating Environment and Future Outlook - Management expects market conditions in 2026 to be similar to those in 2025, with pricing and repair/replacement activity driving growth [7] - The company anticipates reported sales growth of 8%-12% and organic sales growth of 2%-6% for 2026, with specific challenges in Europe [17][18] - Management remains cautious about the European market, expecting volume to be muted and margins to be flat [62] Other Important Information - The company completed two acquisitions, Superior Boiler and Saudi Cast, which are expected to be accretive to adjusted EPS in 2026 [4][5] - The company returned $83 million to shareholders through dividends and share repurchases, increasing the annual dividend payout by approximately 20% [16] Q&A Session Summary Question: M&A Strategy and Revenue Contribution - Management emphasized that M&A is a key part of the strategy, aiming for acquisitions to be accretive to EPS in the first year and targeting a return on invested capital of 10% by year three or five [27][29] Question: Data Center Growth - Management indicated that data center sales are growing at the higher end of double digits, with a significant focus on this market [30][31] Question: Organic Growth Guidance - Management confirmed that the 80/20 revenue is included in the organic growth guidance, with expectations for price to be low single digits and volume to be offset by the 80/20 efforts [38][41] Question: Product Rationalization - Management clarified that the product rationalization involves exiting lower-margin retail and OEM channels, reallocating resources to higher-margin businesses [78][79] Question: Price and Cost Dynamics - Management expects higher prices in Q1 due to prior year tariff-related increases, with a potential for additional price increases mid-year if copper prices continue to rise [85][86]

Financial Data and Key Metrics Changes - Core FFO per share for Q4 and full year 2025 was $0.32 and $1.17 respectively, aligning with guidance [9] - Same-store NOI grew 1.8% in Q4 and 2.4% for the full year, driven by a 2% increase in same-store revenue [9][10] - Average effective monthly rents increased by 60 basis points in Q4 and 80 basis points for the full year [11][12] Business Line Data and Key Metrics Changes - Same-store revenue growth in Q4 was supported by a 124 basis point improvement in bad debt and a 60 basis point increase in average effective monthly rents [10] - For 2025, same-store operating expenses were modestly higher due to increased advertising and contract service costs, offset by lower insurance and real estate taxes [11] Market Data and Key Metrics Changes - Job growth in major markets is forecasted to average 60 basis points, double the national average of 30 basis points [8] - The majority of NOI is generated from communities in high in-migration states, with nearly 70% of NOI from seven of the ten highest in-migration states [8] Company Strategy and Development Direction - The company plans to renovate between 2,000 and 2,500 units in 2026, with a focus on value-add programs [7] - The strategy includes maintaining operational stability and efficiency to maximize revenue growth while capitalizing on market recovery [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of market fundamentals, driven by job and population growth exceeding national averages [23] - The company anticipates same-store NOI growth of 1.7% and a 3.4% increase in total same-store operating expenses for 2026 [18][20] Other Important Information - The company sold a 356-unit community for $50 million and entered a new joint venture for a 318-unit community [14] - A $350 million unsecured term loan was secured to improve liquidity and manage debt maturities [16] Q&A Session Summary Question: How does the new lease rate growth assumption incorporate market rent growth? - The new lease growth starts negative in January and improves throughout the year, with first half guidance at -2.25% and second half at +75 basis points [25] Question: Can you discuss the performance of non-same-store properties? - Non-same-store properties are performing in line with expectations, but two development deals are behind schedule due to higher concessions [27] Question: What impact do concessions have on rent growth projections? - Lower concessions are expected in the second half of the year, which should improve rental rate growth [31] Question: What are the expectations for occupancy stabilization at the Flatirons development? - Occupancy is expected to stabilize at about 90% by June, which is a quarter behind expectations due to market supply pressures [80] Question: What is the strategy regarding fixed and floating rate debt? - The company plans to maintain a more floating rate debt strategy in the current environment, with a focus on managing interest rate expenses [87]

Financial Data and Key Metrics Changes - Fourth quarter sales were impacted by a quality event with the largest customer, but excluding this event, the company delivered strong financial results with 7% year-on-year organic growth [4][15] - Value-Added Sales were $253.9 million, up 7% organically from the prior year, excluding precision clad strip, but down 14% overall due to the quality event [15] - Adjusted EBITDA was $57 million, or 22.5% of Value-Added Sales, down 7% year-over-year, but up 170 basis points from a margin perspective [16][20] - Adjusted earnings per share was $5.44 for the year, up 2% compared to the prior year [20] Business Line Data and Key Metrics Changes - Electronic Materials experienced a 20% increase in Value-Added Sales, driven by strength in the semiconductor market, with an EBITDA margin of 23.4%, up nearly 500 basis points year-over-year [17][18] - Precision Optics delivered a 26% increase in sales, marking the third consecutive quarter of top-line improvement, with an EBITDA margin of 15.7% [18] - Performance Materials saw Value-Added Sales of $132.4 million, down 32% year-over-year, primarily due to lower precision clad strip sales [16] Market Data and Key Metrics Changes - The semiconductor market is experiencing strong growth, with order rates up 6% year-on-year, and 14% excluding China [9] - The new energy market saw more than doubling of sales year-on-year, supported by a multi-year supply agreement with Commonwealth Fusion Systems [10] - Defense sales surpassed $100 million for the second consecutive year, with 10% yearly growth since 2020 [10] Company Strategy and Development Direction - The company is focused on operational improvements, disciplined cost management, and strategic investments to achieve a midterm EBITDA margin target of 23% [12][20] - The transformation of Precision Optics is expected to unlock additional growth and margin expansion opportunities [13] - The company aims to capitalize on the growth in the semiconductor market driven by AI and data center demand [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence entering 2026, expecting approximately 15% earnings growth driven by new business wins and market recovery [11][22] - The company anticipates continued progress toward its midterm EBITDA margin target, with free cash flow generation expected to strengthen [12][22] - Management highlighted the importance of strong partnerships with customers and the commitment to delivering high-quality products [6][14] Other Important Information - The company completed the acquisition of Konasol's semiconductor manufacturing footprint in Korea, positioning it to deliver locally to leading semiconductor manufacturers [10] - A $65 million investment from a major U.S. defense prime was secured to expand beryllium capacity, enhancing long-term growth prospects [11] Q&A Session Summary Question: Details on the precision clad strip quality issues and customer expectations - Management explained the quality event was due to a control failure in production, which was addressed with corrective actions and enhanced quality control measures [26][27] Question: Electronic Materials business performance and margin expectations - Management noted that while there was strong sequential growth in sales, margin performance was affected by mixed factors and one-time items [31][34] Question: Beryllium capacity and government strategic reserves - Management stated that while they cannot discuss government plans in detail, they are well-positioned to support customer needs and have good beryllium capacity [36][38] Question: Working capital needs and inventory management - Management acknowledged that growth has led to increased working capital needs, particularly in inventory, but they are implementing initiatives to manage it efficiently [71][74] Question: Energy market contributions and order book dynamics - Management confirmed that the energy market is seeing significant growth, with new contracts contributing to the order book, and they expect this trend to continue [61][85]

Financial Data and Key Metrics Changes - FBRT reported GAAP net income of $18.4 million, or $0.13 per fully converted common share, with distributable earnings of $17.9 million, or $0.12 per fully converted share [13] - The company decided to reset the quarterly dividend to $0.20 per common share starting Q1 2026 to stabilize book value and better match current earnings to dividends [7][8] - Book value per share ended the quarter at $14.15, reflecting dividends outpacing earnings [15] Business Line Data and Key Metrics Changes - The core portfolio finished Q4 at approximately $4.4 billion, with 77% of loans backed by multifamily assets [19] - During Q4, the company originated 37 loans at a weighted average spread of 284 basis points, with multifamily representing 76% of new loan originations [20] - Agency volume reached $1.1 billion in new loan originations for the quarter, with expectations of $4.5 billion to $5.5 billion in 2026 [16] Market Data and Key Metrics Changes - Market conditions are improving, with abundant liquidity and tighter spreads, the tightest seen since pre-GFC days [11] - Regional banks are slowly returning to the market, particularly in the multifamily space, but the company is cautious about chasing current market spreads [11] Company Strategy and Development Direction - The company has transitioned from being a pure play mortgage REIT to a commercial real estate investment platform, focusing on sustainable dividend coverage and book value growth [8][10] - The acquisition of NewPoint is expected to provide steadier recurring servicing and fee revenue, contributing to long-term growth [9][10] - The company aims to balance attractive current income with disciplined book value growth, positioning itself differently from traditional mortgage REITs [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow earnings, despite current challenges and a reset in dividend [29] - The company is navigating a rate-sensitive environment, with expectations that lower rates could significantly increase market volume [58] - Management believes that the disconnect between book value and share price is not reflective of the company's underlying asset quality [62] Other Important Information - The company completed a $1 billion CLO, increasing non-recourse financing capacity and lowering financing costs in 2026 [14] - Share buybacks totaled $14.4 million in Q4, contributing $0.05 to book value, with a reauthorized share repurchase program of $50 million available through December 2026 [15] Q&A Session Summary Question: How should we think about capital allocation this quarter? - Management indicated that they are focused on origination and have a $1.7 billion under-application pipeline, adjusting the mix of origination to avoid chasing tight spreads [26][27] Question: Should we expect the dividend reset to be a good baseline for run rate earnings going forward? - Management expects to grow earnings over the next several quarters and aims to return to a higher earnings level, indicating that the current earnings are not a steady state [28][30] Question: Will the company have some percentage of capital in direct real estate investments going forward? - Management confirmed that they have multiple equity investments and expect to allocate a slightly higher percentage of capital to equity investments over the next few years [34][37] Question: How is the multifamily volume progressing year to date in 2026? - Management noted that the business is highly sensitive to rates, and a slight change could significantly impact volume, indicating uncertainty in the near term [58] Question: Are most of the repayments behind the company? - Management stated that they are cycling through the legacy portfolio and expect to continue addressing legacy positions, with confidence in the quality of the loan portfolio [60][62]