Rithm Capital's Q2 2025: Contradictory Strategies on Newrez, M&A, and Capital Allocation Unveiled

Strategic focus on Newrez, M&A and fundraising strategy, Listing Newrez and capital structure, capital allocation and leverage are the key contradictions discussed in Rithm Capital Corp.'s latest 2025Q2 earnings call, which have significant implications for investor trust and company performance.



Record Origination and Earnings Growth:
- Rithm Capital's subsidiary Genesis reported record origination of $1.25 billion in Q2 2025, up from $1.5 billion to $2 billion when acquired in 2022.
- The growth was driven by a significant increase in production since the acquisition and strong demand for its RTL lending products.

Asset Management and Funds Inflows:
- Rithm Asset Management and Sculptor, Rithm's affiliate, saw $3.5 billion AUM increase since the close of the previous quarter, reaching $36 billion.
- Inflows were led by real estate and ABF (asset-based finance) products, attributed to Rithm's experience and ability to source assets and control their origination and servicing.

Earnings and Return on Equity:
- Rithm Capital reported GAAP net income of $283.9 million, or $0.53 per diluted share, with a return on equity of 17%.
- The strong earnings performance was supported by solid returns in its asset management and origination businesses.

Mortgage Servicing and Third-Party Servicing:
- Newrez, Rithm's mortgage company, grew its servicing portfolio to over $864 billion, with third-party servicing reaching $850 billion.
- The expansion was driven by strategic increases in third-party servicing and geographical expansion of its service offerings.