KKR Real Estate Finance Trust Reports Q2 Net Loss of $35.4mln

• KKR Real Estate Finance Trust reports Q2 2025 net loss of ($35.4) million. • Net loss per diluted share of common stock is ($0.53). • Distributable Loss for Q2 2025 is ($2.9) million. • Distributable Loss per diluted share of common stock is ($0.04).

KKR Real Estate Finance Trust Inc (KREF) has released its second-quarter 2025 earnings report, revealing a net loss of $35.4 million. The company's net loss per diluted share of common stock was ($0.53), while the distributable loss for the period was $2.9 million, with a distributable loss per diluted share of common stock of ($0.04).

The earnings report indicates that KREF's revenue for the quarter was $112.3 million, falling short of analysts' expectations. The company's adjusted revenue was $30.2 million. The net loss is primarily attributed to a realized loss of $20 million, which resulted in a distributable loss of $2.9 million. The net loss per diluted share was influenced by a CECL provision of $50 million, amounting to ($0.74) per diluted share.

The report also highlights that KREF's portfolio originated and funded $211 million and $210 million, respectively, relating to two floating-rate loans. The company's book value per share was $13.84, considering a CECL allowance of $174 million, or ($2.64) per share as of June 30, 2025.

The earnings report underscores the challenges faced by KREF in the real estate finance sector, with the company continuing to grapple with the effects of market conditions and the performance of properties securing its investments. Despite the losses, KREF maintains a conservative balance sheet, with 78% of its financing capacity being fully non-mark-to-market and a current liquidity of 15%.

Analysts have revised their revenue and earnings estimates for KREF, with the full-year 2025 revenue expected to be $0.13 billion and earnings anticipated to be $0.50 per share. The consensus estimate for Q2 2025 revenue is $0.03 billion, with earnings expected to come in at $0.11 per share.

KREF's stock price has been impacted by the earnings report, with analysts offering one-year price targets ranging from $9.50 to $13.00, with an average target of $11.38. The average target implies an upside of 28.10% from the current price of $8.88.

In summary, KREF's Q2 2025 earnings report reflects the challenges faced by the company in the real estate finance sector. Despite the losses, KREF maintains a conservative balance sheet and continues to originate and fund new loans. The earnings report highlights the importance of monitoring market conditions and the performance of properties securing investments in the real estate finance sector.

References:
[1] https://www.gurufocus.com/news/2993440/what-to-expect-from-kkr-real-estate-finance-trust-inc-kref-q2-2025-earnings
[2] https://finance.yahoo.com/news/kkr-real-estate-q2-earnings-202346889.html
[3] https://www.marketscreener.com/news/kkr-real-estate-finance-trust-supplemental-information-for-the-quarter-ended-june-30th-2025-kref-ce7c5cdddc8bf22d