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SEGMENT REPORTING | 3 Months Ended
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Mar. 31, 2025
Segment Reporting [Abstract] |
SEGMENT REPORTING | SEGMENT REPORTING Rithm Capital conducts its business and generates substantially all of its revenues primarily in the U.S. through operating segments that have been aggregated into the following reportable segments: (i) Origination and Servicing, (ii) Investment Portfolio, (iii) Residential Transitional Lending and (iv) Asset Management. Activities that are not directly attributable or not allocated to any of the reportable segments are reported under Corporate as a reconciling item to the Company’s consolidated financial statements. The activities within Corporate primarily consist of general and administrative expenses, corporate cash and related interest income, the Senior Unsecured Notes (as defined in Note 18) and related interest expense, and restricted cash and redeemable noncontrolling interest related to Class A ordinary shares of our consolidated SPAC. In 2024, Rithm Capital reevaluated and revised the composition of its reportable segments based on the changes to its management reporting structure and performance assessment. MSR portfolio serviced by third-parties, government and government-backed securities, including corresponding hedges, servicer advances receivable and Guardian’s operations that were previously reflected within the Investment Portfolio segment are now reflected within the Origination and Servicing segment. Segment information for prior periods has been recast to reflect these changes. Additionally, the title of the Mortgage Loans Receivable segment was changed to Residential Transitional Lending. During the first quarter of 2025 and in future periods, new purchases of government and government-backed securities will be reflected within the Investment Portfolio or the Origination and Servicing segment based on the nature of the business activity and performance assessment. The structure of the reportable segments is differentiated by the nature of the Company’s business activities, which is consistent with the reporting structure of the Company’s internal organization, as well as by the financial information used by the Company’s chief operating decision maker (“CODM”) to make decisions regarding the Company’s business, including resource allocation and performance assessment. The Company’s CODM is the Chairman, Chief Executive Officer and President. The Origination and Servicing segment generates revenue through servicing fee revenue, interest income and gain on originated and sold residential mortgage loans. The Investment Portfolio segment generates revenue from certain real estate securities, SFR properties, residential mortgage loans, consumer loans and certain ancillary and equity method investments primarily in the form of interest income and other investment portfolio revenues. The Residential Transitional Lending segment generates revenue through interest income related to the origination and management of a portfolio of short-term mortgage loans to fund the construction and development of, or investment in, residential properties. The Asset Management segment generates revenue through management and incentive fees based primarily on the assets under management (“AUM”) and performance of funds and accounts managed by the Company. Income before income taxes is the measure of segment profit and loss that is determined in accordance with the measurement principles used in measuring the corresponding amounts in the consolidated financial statements and used by the CODM to evaluate segment results. It is also one of the factors considered in determining capital allocation among the segments, assessing performance for each segment and determining compensation for certain employees. The following tables summarize segment financial information, including the Corporate category explained above, which in total reconciles to the same data for Rithm Capital on a consolidated basis:
|  | Origination and Servicing |  | Investment Portfolio |  | Residential Transitional Lending |  | Asset Management |  | Corporate Category |  | Total
Three Months Ended March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables |  | $ | 570,801 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 570,801 |
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(146,891)) |  | (541,916) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (541,916) |
Servicing revenue, net |  | 28,885 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 28,885 |
Interest income |  | 292,561 |  |  | 71,790 |  |  | 66,508 |  |  | 9,413 |  |  | 988 |  |  | 441,260 |
Gain on originated residential mortgage loans, held-for-sale, net |  | 151,494 |  |  | 8,295 |  |  | — |  |  | — |  |  | — |  |  | 159,789 |
Other revenues |  | 25,738 |  |  | 25,035 |  |  | — |  |  | — |  |  | — |  |  | 50,773 |
Asset management revenues |  | — |  |  | — |  |  | — |  |  | 87,672 |  |  | — |  |  | 87,672 |
Total Revenues |  | 498,678 |  |  | 105,120 |  |  | 66,508 |  |  | 97,085 |  |  | 988 |  |  | 768,379 |
Interest expense and warehouse line fees |  | 292,948 |  |  | 59,636 |  |  | 31,701 |  |  | 14,089 |  |  | 20,680 |  |  | 419,054 |
Other segment expenses(A) |  | 143,767 |  |  | 22,992 |  |  | 4,831 |  |  | 31,591 |  |  | 9,797 |  |  | 212,978 |
Compensation and benefits |  | 172,702 |  |  | 1,162 |  |  | 14,391 |  |  | 65,330 |  |  | 17,882 |  |  | 271,467 |
Depreciation and amortization |  | 7,659 |  |  | 7,954 |  |  | 1,567 |  |  | 7,384 |  |  | 4 |  |  | 24,568 |
Total Operating Expenses |  | 617,076 |  |  | 91,744 |  |  | 52,490 |  |  | 118,394 |  |  | 48,363 |  |  | 928,067 |
Realized and unrealized gains (losses), net |  | 208,538 |  |  | 3,094 |  |  | 2,043 |  |  | (6,280) |  |  | — |  |  | 207,395 |
Other income (loss), net |  | (118) |  |  | 1,489 |  |  | (141) |  |  | 7,838 |  |  | 5 |  |  | 9,073 |
Total Other Income |  | 208,420 |  |  | 4,583 |  |  | 1,902 |  |  | 1,558 |  |  | 5 |  |  | 216,468 |
Income (Loss) before Income Taxes |  | 90,022 |  |  | 17,959 |  |  | 15,920 |  |  | (19,751) |  |  | (47,370) |  |  | 56,780 |
Income tax expense (benefit) |  | (56,694) |  |  | (8,512) |  |  | (1,090) |  |  | 42,366 |  |  | — |  |  | (23,930) |
Net Income (Loss) |  | 146,716 |  |  | 26,471 |  |  | 17,010 |  |  | (62,117) |  |  | (47,370) |  |  | 80,710 |
Noncontrolling interests in income of consolidated subsidiaries |  | 354 |  |  | 728 |  |  | — |  |  | 4 |  |  | — |  |  | 1,086 |
Redeemable noncontrolling interests in income of consolidated subsidiaries |  | — |  |  | — |  |  | — |  |  | 3 |  |  | 810 |  |  | 813 |
Net Income (Loss) Attributable to Rithm Capital Corp. |  | 146,362 |  |  | 25,743 |  |  | 17,010 |  |  | (62,124) |  |  | (48,180) |  |  | 78,811 |
Change in redemption value of redeemable noncontrolling interests |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,611 |  |  | 15,611 |
Dividends on preferred stock |  | — |  |  | — |  |  | — |  |  | — |  |  | 26,677 |  |  | 26,677 |
Net Income (Loss) Attributable to Common Stockholders |  | $ | 146,362 |  |  | $ | 25,743 |  |  | $ | 17,010 |  |  | $ | (62,124) |  |  | $ | (90,468) |  |  | $ | 36,523 |
(A)The Origination and Servicing segment’s other segment expenses primarily include expenses related to loan origination and servicing, information technology, occupancy and legal and professional services. The Investment Portfolio segment’s other segment expenses primarily include expenses related to loan servicing and property and maintenance. The Residential Transitional Lending segment’s other segment expenses primarily include expenses related to loan origination, occupancy and information technology. The Asset Management segment’s other segment expenses primarily include expenses related to legal and professional services, information technology and occupancy.
|  | Origination and Servicing |  | Investment Portfolio |  | Residential Transitional Lending |  | Asset Management |  | Corporate Category |  | Total
March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |
Investments |  | $ | 22,756,176 |  |  | $ | 3,502,073 |  |  | $ | 2,335,218 |  |  | $ | — |  |  | $ | — |  |  | $ | 28,593,467 |
Cash and cash equivalents |  | 1,000,135 |  |  | 24,149 |  |  | 47,107 |  |  | 130,300 |  |  | 292,143 |  |  | 1,493,834 |
Restricted cash |  | 174,176 |  |  | 52,068 |  |  | 34,673 |  |  | 19,971 |  |  | 230,810 |  |  | 511,698 |
Other assets |  | 6,166,441 |  |  | 2,271,563 |  |  | 204,183 |  |  | 977,086 |  |  | 4,938 |  |  | 9,624,211 |
Goodwill |  | 29,468 |  |  | — |  |  | 55,731 |  |  | 48,633 |  |  | — |  |  | 133,832 |
Assets of consolidated CFEs(A) |  | — |  |  | 2,718,096 |  |  | 990,168 |  |  | 1,264,537 |  |  | — |  |  | 4,972,801 |
Total Assets |  | $ | 30,126,396 |  |  | $ | 8,567,949 |  |  | $ | 3,667,080 |  |  | $ | 2,440,527 |  |  | $ | 527,891 |  |  | $ | 45,329,843 |
Debt |  | $ | 20,352,469 |  |  | $ | 4,252,015 |  |  | $ | 1,934,141 |  |  | $ | 451,192 |  |  | $ | 1,034,959 |  |  | $ | 28,024,776 |
Other liabilities |  | 4,248,496 |  |  | 419,235 |  |  | 26,469 |  |  | (12,881) |  |  | 251,701 |  |  | 4,933,020 |
Liabilities of consolidated CFEs(A) |  | — |  |  | 2,310,483 |  |  | 860,843 |  |  | 1,059,467 |  |  | — |  |  | 4,230,793 |
Total Liabilities |  | 24,600,965 |  |  | 6,981,733 |  |  | 2,821,453 |  |  | 1,497,778 |  |  | 1,286,660 |  |  | 37,188,589 |
Redeemable Noncontrolling Interests of Consolidated Subsidiaries |  | — |  |  | — |  |  | — |  |  | 25,604 |  |  | 230,810 |  |  | 256,414 |
Total Stockholders’ Equity |  | 5,525,431 |  |  | 1,586,216 |  |  | 845,627 |  |  | 917,145 |  |  | (989,579) |  |  | 7,884,840 |
Noncontrolling interests in equity of consolidated subsidiaries |  | 9,100 |  |  | 58,688 |  |  | — |  |  | 40,928 |  |  | — |  |  | 108,716 |
Stockholders’ Equity in Rithm Capital Corp. |  | $ | 5,516,331 |  |  | $ | 1,527,528 |  |  | $ | 845,627 |  |  | $ | 876,217 |  |  | $ | (989,579) |  |  | $ | 7,776,124 |
Investments in Equity Method Investees |  | $ | 25,179 |  |  | $ | 294,756 |  |  | $ | 14,407 |  |  | $ | 205,573 |  |  | $ | — |  |  | $ | 539,915 |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Total Assets |  | $ | 32,418,256 |  |  | $ | 7,463,738 |  |  | $ | 3,439,075 |  |  | $ | 2,508,130 |  |  | $ | 219,758 |  |  | $ | 46,048,957 |
(A)Includes assets and liabilities of certain consolidated VIEs that meet the definition of CFEs. These assets can only be used to settle obligations and liabilities of such VIEs for which creditors do not have recourse to Rithm Capital Corp.
|  | Origination and Servicing |  | Investment Portfolio |  | Residential Transitional Lending |  | Asset Management |  | Corporate Category |  | Total
Three Months Ended March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables |  | $ | 469,891 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 469,891 |
Change in fair value of MSRs and MSR financing receivables (includes realization of cash flows of $(116,839)) |  | 84,175 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 84,175 |
Servicing revenue, net |  | 554,066 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 554,066 |
Interest income |  | 275,205 |  |  | 89,959 |  |  | 64,720 |  |  | 4,909 |  |  | 2 |  |  | 434,795 |
Gain (loss) on originated residential mortgage loans, held-for-sale, net |  | 145,869 |  |  | (3,411) |  |  | — |  |  | — |  |  | — |  |  | 142,458 |
Other revenues |  | 32,379 |  |  | 25,969 |  |  | — |  |  | — |  |  | — |  |  | 58,348 |
Asset management revenues |  | — |  |  | — |  |  | — |  |  | 70,951 |  |  | — |  |  | 70,951 |
Total Revenues |  | 1,007,519 |  |  | 112,517 |  |  | 64,720 |  |  | 75,860 |  |  | 2 |  |  | 1,260,618 |
Interest expense and warehouse line fees |  | 288,856 |  |  | 70,392 |  |  | 32,414 |  |  | 7,621 |  |  | 10,544 |  |  | 409,827 |
Other segment expenses(A) |  | 114,506 |  |  | 21,541 |  |  | 3,187 |  |  | 23,922 |  |  | 9,944 |  |  | 173,100 |
Compensation and benefits |  | 157,981 |  |  | 568 |  |  | 11,303 |  |  | 63,112 |  |  | 2,814 |  |  | 235,778 |
Depreciation and amortization |  | 14,630 |  |  | 7,742 |  |  | 1,567 |  |  | 8,013 |  |  | — |  |  | 31,952 |
Total Operating Expenses |  | 575,973 |  |  | 100,243 |  |  | 48,471 |  |  | 102,668 |  |  | 23,302 |  |  | 850,657 |
Realized and unrealized gains (losses), net |  | (65,257) |  |  | 2,687 |  |  | 24,566 |  |  | (6,842) |  |  | — |  |  | (44,846) |
Other income, net |  | 25 |  |  | 11,479 |  |  | 274 |  |  | 3,969 |  |  | 37 |  |  | 15,784 |
Total Other Income (Loss) |  | (65,232) |  |  | 14,166 |  |  | 24,840 |  |  | (2,873) |  |  | 37 |  |  | (29,062) |
Income (Loss) before Income Taxes |  | 366,314 |  |  | 26,440 |  |  | 41,089 |  |  | (29,681) |  |  | (23,263) |  |  | 380,899 |
Income tax expense (benefit) |  | 96,201 |  |  | 1,248 |  |  | (333) |  |  | (3,704) |  |  | — |  |  | 93,412 |
Net Income (Loss) |  | 270,113 |  |  | 25,192 |  |  | 41,422 |  |  | (25,977) |  |  | (23,263) |  |  | 287,487 |
Noncontrolling interests in income of consolidated subsidiaries |  | 55 |  |  | 2,037 |  |  | — |  |  | 1,360 |  |  | — |  |  | 3,452 |
Net Income (Loss) Attributable to Rithm Capital Corp. |  | 270,058 |  |  | 23,155 |  |  | 41,422 |  |  | (27,337) |  |  | (23,263) |  |  | 284,035 |
Dividends on preferred stock |  | — |  |  | — |  |  | — |  |  | — |  |  | 22,395 |  |  | 22,395 |
Net Income (Loss) Attributable to Common Stockholders |  | $ | 270,058 |  |  | $ | 23,155 |  |  | $ | 41,422 |  |  | $ | (27,337) |  |  | $ | (45,658) |  |  | $ | 261,640 |
(A)The Origination and Servicing segment’s other segment expenses primarily include expenses related to loan origination and servicing, information technology, occupancy and legal and professional services. The Investment Portfolio segment’s other segment expenses primarily include expenses related to loan servicing and property and maintenance. The Residential Transitional Lending segment’s other segment expenses primarily include expenses related to loan origination, occupancy and information technology. The Asset Management segment’s other segment expenses primarily include expenses related to legal and professional services, information technology and occupancy.

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- Definition The entire disclosure for reporting segments including data and tables. 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