Did Redwood Trust beat or miss consensus estimates last quarter?

What does Redwood Trust do and what are its main business segments?

What is the revenue and EPS growth rate for Redwood Trust year over year?

What guidance did Redwood Trust's management provide for the next earnings period?

What factors drove the changes in Redwood Trust's revenue and profit?

What is Redwood Trust's gross profit margin?

What were the key takeaways from Redwood Trust’s earnings call?

What were the key takeaways from Redwood Trust's earnings call?

- **Record Growth**: $7B total loans originated (53% QoQ at Sequoia, 4x QoQ at Aspire) 
- **Strategic Capital Deployment**: $150M freed from legacy assets reinvested into 20%+ ROE platforms 
- **Core Earnings Strength**: $0.20 EPS/core EAD with 17% ROE, up from $0.18 prior quarter 
- **Partnership Expansion**: $400M secured facility with CPP Investments (up from $250M) 
- **Efficiency Gains**: 3% QoQ decline in operating expenses, 85% reduction in securities repo balances 
- **Market Leadership**: 7% jumbo market share, top 5 non-QM aggregator, and leading investor loan platform

**【CEO Opening Remarks】**
- **Strategic Transition Progress**: Reduced legacy capital exposure to 25% (from 33%), with $150M freed for reinvestment into high-ROE mortgage banking platforms. 
- **Record Origination Volume**: $7B in loans locked/originated (Q3 record), including $5.1B at Sequoia (53% QoQ growth) and $1.2B at Aspire (4x QoQ growth). 
- **AI Investment**: Scaling AI-driven document intelligence to accelerate loan processing and risk management. 
- **Partnership Expansion**: Extended CPP Investments JV with $150M increase in secured borrowing facility to $400M. 
- **Legacy Portfolio Management**: Sold $600M of legacy assets at accretive levels, with 25% legacy capital allocation vs. 33% prior. 

**【President’s Operating Results】**
- **Sequoia Platform**: 
  - $5.1B locked (7% jumbo market share vs. 1-2% in 2023) 
  - 48% bank collateral, 25% seasoned loans 
  - 13 securitizations/YTD $9B distributed 
- **Aspire Platform**: 
  - $1.2B locked (top 5 non-QM aggregator) 
  - 749 avg credit score, 71% LTV 
  - 50% new loan originator partners added Q3 
- **CoreVest Platform**: 
  - $521M funded (40% RTL/DSCR mix) 
  - 14% YoY growth in smaller balance products 
  - $1.5B distributed via joint ventures/YTD 

**【CFO Financial Commentary】**
- **GAAP Results**: $9.5M) vs. $100M net loss ($0.08 EPS loss prior quarter 
- **Core Earnings**: $27M core EAD ($0.20 EPS, 17% ROE) 
  - Sequoia: $34M net income (29% ROE) 
  - CoreVest: $3.5M net income (30% ROE) 
  - Redwood Investments: $10M net income (10% ROE) 
- **Expense Management**: 3% QoQ decline in operating expenses 
- **Balance Sheet**: 
  - Recourse leverage 4.0x (vs. 3.2x prior) 
  - $28M remaining in securities repo (down 85% YoY) 
  - $150M share buyback (5% of outstanding shares) 

**【Q&A Highlights】**
- **Earnings Power Outlook**: Post-2026 legacy exit, GAAP earnings will align with $0.20/core EAD, plus 20%+ ROE on redeployed capital 
- **ROE Drivers**: Sequoia (28% Q3 ROE), Aspire (expanding market share), CoreVest (30% ROE) 
- **Aspire Growth**: 3% annualized market share, targeting 80% seller network coverage 
- **Rate Environment**: 6.25% jumbo coupons, potential refi acceleration with rate declines 
- **Credit Performance**: <3% 90+ day delinquencies in securitized bridges, improving repayment velocity

RWT

RWT fundamentals

You can ask Aime