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

Rhea-AI Summary

Apollo Commercial Real Estate Finance (NYSE:ARI) has reported its Q2 2025 financial results, with net income of $0.12 per diluted share and Distributable Earnings of $0.26 per diluted share. The company demonstrated strong execution of its business plan, successfully committing $2.0 billion to new loans in the first half of 2025.

The capital deployment strategy focuses on redeploying funds from loan repayments and managing resolution on focus assets. ARI maintains its REIT status by distributing at least 90% of its REIT taxable income annually. The company will host an earnings conference call on July 30, 2025, at 10am ET to discuss these results in detail.

Positive

• Committed $2.0 billion to new loans in H1 2025
• Successfully executing capital redeployment strategy from loan repayments
• Maintained stable Distributable Earnings at $0.26 per share

Negative

• Net income per diluted share at $0.12 indicates relatively modest profitability
• Potential exposure to real estate market volatility through focus assets

Insights

Commercial Real Estate Financial Analyst

ARI reports modest Q2 earnings with $0.12 EPS, strong loan commitments of $2B YTD, and continues executing its strategic capital redeployment plan.

Apollo Commercial Real Estate Finance's Q2 2025 results demonstrate the company's ongoing execution of its strategic business plan, with $0.12 per share in net income and $0.26 in Distributable Earnings (DE). The $0.14 gap between GAAP earnings and DE highlights significant non-cash or one-time adjustments, which is typical for mortgage REITs but warrants attention.

The company's $2.0 billion in new loan commitments during the first half of 2025 shows robust origination activity, indicating ARI is successfully finding deployment opportunities in the commercial real estate lending market. This capital deployment comes from two sources: loan repayments and resolutions of what management describes as "focus assets" - likely underperforming loans requiring active management.

ARI's strategy appears to involve recycling capital from maturing or resolved loans into new opportunities, rather than significant portfolio growth. This approach is prudent in the current commercial real estate environment, where property valuations remain under pressure in certain sectors.

The earnings report lacks detailed information about loan performance metrics, portfolio composition changes, or credit quality trends, which would provide deeper insight into ARI's risk profile. However, the absence of any mentioned loan loss provisions or realized losses during the six-month period is a positive indicator for portfolio stability.

The difference between GAAP and Distributable Earnings suggests potential unrealized marks or CECL (Current Expected Credit Losses) provisions that are being excluded from the distributable figure. This is standard practice but reinforces the importance of understanding what's driving this differential when evaluating ARI's actual economic performance.

NEW YORK, July 29, 2025 (GLOBE NEWSWIRE) -- Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE: ARI) today reported results for the quarter and six months ended June 30, 2025.

Net income attributable to common stockholders per diluted share of common stock was $0.12 for the quarter ended June 30, 2025. Distributable Earnings per diluted share of common stock (a non-GAAP financial measure defined below) was $0.26 for the quarter ended June 30, 2025.

Commenting on second quarter 2025 performance, Stuart Rothstein, Chief Executive Officer and President of the Company, said: “We continue to execute on the business plan laid out for ARI. For the first six months of the year, ARI committed $2.0 billion to new loans as we redeploy capital from repayments and the capital generated from managing towards resolution on ARI’s focus assets.”

ARI issued a detailed presentation of the Company’s quarter ended June 30, 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 July 30, 2025 at 10am ET. To register for the call, please use the following link:

https://register-conf.media-server.com/register/BId90d356a730f472ab59dd717370b3c5f

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 six months ended June 30, 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 June 30, 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 $785 billion of assets under management at March 31, 2025.

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 Q2 2025?

ARI reported net income of $0.12 per diluted share and Distributable Earnings of $0.26 per diluted share for Q2 2025.

How much did Apollo Commercial Real Estate Finance (ARI) commit to new loans in H1 2025?

ARI committed $2.0 billion to new loans in the first half of 2025 as part of their capital redeployment strategy.

When is ARI's Q2 2025 earnings conference call?

ARI's earnings conference call is scheduled for July 30, 2025 at 10:00 AM ET.

What is ARI's dividend distribution requirement as a REIT?

As a REIT, ARI must distribute at least 90% of its REIT taxable income annually to maintain its REIT status.

How does Apollo Commercial Real Estate Finance calculate Distributable Earnings?

ARI calculates Distributable Earnings by adjusting GAAP net income for items including equity-based compensation, unrealized gains/losses, foreign currency gains/losses, and provisions for expected credit losses.