What is the revenue and EPS growth rate for Apollo Commercial Real Estate Finance year over year?

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Did Apollo Commercial Real Estate Finance beat or miss consensus estimates last quarter?

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What were the key takeaways from Apollo Commercial Real Estate Finance's earnings call?

- **Q2 Loan Originations Surpass $1.4B**: Year-to-date originations reach $2B, with 25% of portfolio in residential properties.
- **Focus Asset Progress**: 111 West 57th reduces basis by $141M; The Brook 500-unit multifamily development 15% leased.
- **Balance Sheet Strength**: $750M Term Loan refinanced, extending maturity to 2029. Liquidity at $208M, book value per share $12.59.
- **European Expansion**: 50% of portfolio in Europe, 18% of originations year-to-date.
- **Earnings Growth Potential**: 30-40% earnings growth from redeploying $300M+ in non-earning assets.
- **Dividend Policy**: Maintains 100% payout ratio, with quarterly reviews.

**【CEO Summary Section】**
- **Strong Q2 Performance**: Committed $1.4 billion in new loans, bringing year-to-date originations to $2 billion. Residential properties now comprise 25% of the portfolio, with 2/3 of these loans originated in the last 24 months.
- **Focus Asset Progress**: 111 West 57th Street generated $170 million in proceeds, reducing ARI's basis. The Brook multifamily development in Brooklyn opened its leasing office, with 15% of market-rate units leased. Liberty Center in Cincinnati is entering the marketing phase.
- **Balance Sheet Optimization**: Refinanced $750 million Term Loan B at SOFR + 3.25%, extending maturities to 2029. This highlights investor confidence and reduces cash drag.
- **European Growth**: 50% of the portfolio is in Europe, with year-to-date originations at 18%. Recent interest rate cuts are driving acquisition activity.

**【CFO Financial Commentary】**
- **Financial Results**: Q2 distributable earnings of $36 million ($0.26 per share), up 8% from Q1. GAAP net income was $18 million ($0.12 per share). Loan portfolio grew to $8.6 billion, with a weighted average unlevered yield of 7.8%.
- **CECL Allowance**: General CECL increased by $3.1 million due to portfolio growth, but no asset-specific allowances were recorded. Total CECL as a percentage of amortized cost decreased to 429 basis points.
- **Liquidity and Borrowing**: Secured $1.4 billion in new credit facilities, ending the quarter with $208 million in liquidity. Book value per share (excluding CECL) was $12.59.
- **Special Proceeds**: Received $18 million from a Massachusetts settlement, which will be redeployed into new loans.

**【Q&A Highlights】**
- **The Brook Update**: Expected to be cash flow positive by early 2026, with potential monetization in Q1-Q2 2026. Discussions ongoing to increase density through adjacent land parcels.
- **Portfolio Growth**: Leverage expected to remain around 4x, with capital redeployment driving 30-40% earnings growth. Non-earning assets (e.g., The Brook) will be converted into earning ones.
- **CRE Market Outlook**: Increased transaction activity in housing, seniors housing, and hotels. Office deals remain limited in ARI's strategy.
- **Dividend Policy**: Plans to maintain dividend payout of ~100% of earnings, with quarterly reviews. No material tax constraints on dividend growth.
- **Seniors Housing Focus**: Driven by demographic trends and supply-demand imbalance, with a focus on private-pay, independent living properties.

Apollo Commercial Real Estate Finance (ARI)-30 Jul 25-2025 Q2 Earnings call transcript

- **Loan Growth Momentum**: $1.5B year-to-date originations, including $700M post-quarter, driven by residential and data center focus.
- **111 West 57th Progress**: Senior loan repaid post-quarter, $127M additional proceeds expected, reducing ARI's exposure.
- **Dividend Support**: Q1 distributable earnings at 96% coverage, confident in FY25 ability to meet dividend run rate.
- **European Expansion**: $4B portfolio with Apollo's London team, hedged against FX risk, targeting non-securitized deals.
- **Capital Deployment**: $1.5B repayments expected FY25, enabling active origination without equity issuance.

**【CEO Opening Remarks】**
- Highlighted macroeconomic risks (tariffs, recession fears) but noted commercial real estate's lagging indicator status.
- Q1 loan originations of $650M, with 3/4 in residential (strong secular tailwinds) and 1 in data centers (pre-leased, on-time delivery focus).
- Year-to-date originations $1.5B, including post-quarter $700M.
- 111 West 57th Street sales momentum: $45M Q1 proceeds, $127M pending post-quarter, reducing ARI's net exposure.
- Confident in 2025 distributable earnings to support current dividend run rate despite Q1 shortfall.

**【CFO Financial Review】**
- Q1 distributable earnings: $33M ($0.24/share), 96% dividend coverage vs. $0.25 quarterly rate.
- Loan portfolio growth to $7.7B (from $7.1B), weighted average yield 7.9%.
- Strong capital deployment: $650M new loans + $73M add-ons, $93M repayments redeployed.
- CECL allowance up $4M to $475M (5.75% of portfolio), reflecting macro caution.
- Debt-to-equity ratio 3.5x (vs. 3.2x prior quarter), liquidity $218M.

**【Q&A Key Themes】**
- **Asset Resolution Progress**: 111 West 57th Street senior loan repaid post-quarter, $127M additional proceeds expected. Liberty Center sale targeted for late 2025.
- **Market Sentiment**: Despite equity volatility, credit markets remain active; $1.5B repayments expected FY25, enabling continued origination pace.
- **European Strategy**: $4B European portfolio driven by Apollo's London-based team, focusing on non-securitized deals (e.g., logistics, data centers). No FX risk due to hedging.
- **Capital Deployment**: FY25 growth funded by repayments and asset resolutions; no equity issuance planned until sector recovers above book value.

Apollo Commercial Real Estate Finance (ARI)-25 Apr 25-2025 Q1 Earnings call transcript

- **Record Origination**: $1.9 billion in 2024, with 30% of portfolio originated in 2023-2024 at higher spreads.
- **Earnings Upside**: redeploying $300M Brooklyn equity could add $0.40-$0.60 per share in 2025.
- **Strong Liquidity**: $380M cash & undrawn capacity, 3.2x debt-to-equity ratio.
- **Growth Catalysts**: $1B+ pipeline for 2025, targeting $7.5-$8B portfolio.
- **Market Recovery**: multifamily, industrial, and UK/Europe leading the charge; office cautiously improving.
- **Risk Management**: stable CECL at $379M, 90%+ leased Liberty Center, and 4 units sold at 111W57.

**【CEO Summary Section】**
- ARI originated $782 million in new loans in Q4 2024, bringing total annual origination to $1.9 billion. 30% of the portfolio was originated in the past 24 months, benefiting from wider spreads and higher rates.
- The company expects capital deployment to accelerate in 2025 as $300 million of equity tied to the Brooklyn multifamily development is redeployed, potentially adding $0.40-$0.60 per share in annual earnings.
- Key nonperforming assets include 111 West 57th Street (4 units under contract) and Liberty Center (90% leased), with potential resolutions in H2 2025.

**【CFO Financial Commentary】**
- Q4 2024 distributable earnings: $45 million ($0.32 per share), with 128% dividend coverage. Full-year distributable earnings: $190 million ($1.33 per share), 111% coverage.
- Loan portfolio: $7.1 billion with a weighted average unlevered yield of 8.1%. CECL allowance remains stable at $379 million ($2.74 per share).
- Debt-to-equity ratio improved to 3.2x, liquidity at $380 million, and book value per share (excluding CECL) at $12.77.

**【Q&A Key Highlights】**
- **Geographic & Asset Focus**: Multifamily (US & UK), senior housing, data centers. Europe remains a key growth market with similar risk profiles to US assets.
- **Loan Growth Potential**: Pipeline of $1 billion+ for H1 2025, targeting $7.5-$8 billion portfolio by end-2025 through repayments and new originations.
- **Market Dynamics**: Borrowers returning to sidelines post-Fed rate cuts; multifamily and industrial showing strength, while office remains cautious.
- **CLO Market**: No immediate plans to use CLOs; prefer flexible warehouse financing with current partners.
- **REO Resolution**: DC hotel performing above pre-COVID levels; Atlanta hotel under evaluation for CapEx vs. sale.

**【Risk & Outlook】**
- Specific reserves remain stable, with potential clawback of $375 million+ in 2025 from asset resolutions.
- 2025 earnings expected lower than Q4 2024 due to Fed rate cuts, but dividend coverage maintained.
- Focus on proactive asset management and redeploying underperforming capital into higher ROE opportunities.

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