Apollo Commercial Real Estate Finance, Inc. Reports First Quarter 2025 Results

Rhea-AI Summary

Apollo Commercial Real Estate Finance (NYSE:ARI) has released its Q1 2025 financial results, reporting net income of $0.16 per diluted share and Distributable Earnings of $0.24 per diluted share for the quarter ended March 31, 2025.

The company deployed $650 million in capital during Q1 2025, with CEO Stuart Rothstein noting that earnings were impacted by elevated repayments at the end of Q4 2024 and the timing of first quarter capital deployment. Management continues to focus on redeploying capital into newly originated loans.

Positive

• Significant capital deployment of $650 million in Q1 2025
• Maintained positive Distributable Earnings of $0.24 per share

Negative

• Earnings impacted by elevated Q4 2024 repayments
• Net income per share of $0.16 shows decreased performance

Insights

REIT Financial Analyst

ARI's Q1 reflects transition period with $0.16 EPS/$0.24 distributable earnings, impacted by timing of $650M deployment following Q4 repayments.

Apollo Commercial Real Estate Finance (ARI) reported Q1 2025 results with net income of $0.16 per diluted share and Distributable Earnings of $0.24 per diluted share. These figures reveal important timing dynamics affecting the quarter's performance.

The earnings reflect what CEO Stuart Rothstein directly attributed to two key factors: elevated loan repayments at the end of Q4 2024 and the timing of $650 million in capital deployment during Q1. This creates a clear picture of temporary capital redeployment lag affecting earnings generation.

The $0.08 difference between GAAP earnings and Distributable Earnings is significant for investor analysis. This non-GAAP metric adjusts for non-cash items including unrealized gains/losses, equity-based compensation, and credit loss provisions - providing a clearer view of cash-generating capability that supports dividend payments.

Management's reference to "continued progress with focus assets" indicates ongoing work with potentially challenged loans, though specific performance metrics aren't provided. The emphasis on redeploying capital into newly originated loans suggests a strategic transition to refresh the portfolio.

For REIT investors, the Distributable Earnings figure carries particular importance as it more closely aligns with the company's capacity to maintain dividend payments, though current dividend levels aren't specified in the release.

This quarter represents a transitional period for ARI with the timing mismatch between loan repayments and new originations creating temporary earnings dynamics as the company works to optimize its investment portfolio.

NEW YORK, April 24, 2025 (GLOBE NEWSWIRE) -- Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE:ARI) today reported results for the quarter ended March 31, 2025.

Net income attributable to common stockholders per diluted share of common stock was $0.16 for the quarter ended March 31, 2025. Distributable Earnings per diluted share of common stock (a non-GAAP financial measure defined below) was $0.24 for the quarter ended March 31, 2025.

Commenting on first quarter 2025 performance, Stuart Rothstein, Chief Executive Officer and President of the Company, said:

“ARI’s first quarter earnings reflect the impact of elevated repayments at the end of fourth quarter of 2024 and the timing of our first quarter capital deployment, which totaled $650 million,” said Stuart Rothstein, Chief Executive Officer and President of ARI. “We continue to make progress with our focus assets and remain focused on redeploying the capital into newly originated loans.”

ARI issued a detailed presentation of the Company’s quarter ended March 31, 2025 results, which can be viewed at www.apollocref.com.

Conference Call and Webcast
The Company will hold a conference call to review first quarter results on April 25, 2025 at 10am ET. To register for the call, please use the following link:      

https://register-conf.media-server.com/register/BI9d454c5338474977930d8dafd9ec06d9

After you register, you will receive a dial-in number and unique pin. The Company will also post a link in the Stockholders’ section on ARI’s website for a live webcast. For those unable to listen to the live call or webcast, there will be a webcast replay link posted in the Stockholders’ section on ARI’s website approximately two hours after the call.

Distributable Earnings
“Distributable Earnings,” a non-GAAP financial measure, is defined as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization related to real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on the Company’s foreign currency hedges, and (v) provision for current expected credit losses.

As a REIT, U.S. federal income tax law generally requires the Company to distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that the Company pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its net taxable income. Given these requirements and the Company’s belief that dividends are generally one of the principal reasons shareholders invest in a REIT, the Company generally intends over time to pay dividends to its stockholders in an amount equal to its net taxable income, if and to the extent authorized by the Company’s board of directors. Distributable Earnings is a key factor considered by the Company’s board of directors in setting the dividend and as such the Company believes Distributable Earnings is useful to investors.

The Company believes it is useful to its investors to also present Distributable Earnings prior to net realized loss on investments, in applicable periods, to reflect its operating results because (i) the Company’s operating results are primarily comprised of earning interest income on its investments net of borrowing and administrative costs, which comprise the Company’s ongoing operations and (ii) it has been a useful factor related to the Company’s dividend per share because it is one of the considerations when a dividend is determined. The Company believes that its investors use Distributable Earnings and Distributable Earnings prior to net realized loss on investments or a comparable supplemental performance measure, to evaluate and compare the performance of the Company and its peers.

During the three months ended March 31, 2025, the Company recorded no realized losses in the consolidated statement of operations.

A significant limitation associated with Distributable Earnings as a measure of the Company’s financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, the Company’s presentation of Distributable Earnings may not be comparable to similarly titled measures of other companies, that use different calculations. As a result, Distributable Earnings should not be considered as a substitute for the Company’s GAAP net income as a measure of its financial performance or any measure of its liquidity under GAAP. Distributable Earnings are reduced for realized losses on loans which include losses that management believes are near certain to be realized.

A reconciliation of Distributable Earnings to GAAP net income (loss) available to common stockholders is included in the detailed presentation of the Company’s quarter ended March 31, 2025 results, which can be viewed at www.apollocref.com.

About Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings and other commercial real estate-related debt investments. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, Inc., a high-growth, global alternative asset manager with approximately $751 billion of assets under management at December 31, 2024.

Additional information can be found on the Company’s website at www.apollocref.com.

Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. These forward-looking statements include information about possible or assumed future results of the Company’s business, financial condition, liquidity, results of operations, plans and objectives. When used in this release, the words believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: higher interest rates and inflation; market trends in the Company’s industry, real estate values, the debt securities markets or the general economy; the timing and amounts of expected future fundings of unfunded commitments; the return on equity; the yield on investments; the ability to borrow to finance assets; the Company’s ability to deploy the proceeds of its capital raises or acquire its target assets; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

CONTACT:	Hilary Ginsberg
	Investor Relations
	(212) 822-0767

FAQ

What were ARI's earnings per share for Q1 2025?

ARI reported net income of $0.16 per diluted share and Distributable Earnings of $0.24 per diluted share for Q1 2025.

How much capital did ARI deploy in Q1 2025?

ARI deployed $650 million in capital during the first quarter of 2025.

What factors affected ARI's Q1 2025 earnings?

ARI's Q1 earnings were impacted by elevated repayments at the end of Q4 2024 and the timing of first quarter capital deployment.

What is ARI's dividend distribution policy?

As a REIT, ARI must distribute at least 90% of its taxable income annually and generally intends to pay dividends equal to its net taxable income, subject to board approval.