Onity Group (ONIT) Q4 2025 earnings summary

Executive summary

• Achieved record net income of $185 million and diluted EPS of $21.46 for FY 2025, with Q4 net income of $126 million and EPS of $14.24, driven by strong originations, balanced execution, and effective MSR hedging.

• Released $120 million deferred tax valuation allowance, significantly increasing book value per share and equity.

• Maintained 13 consecutive quarters of positive adjusted pre-tax income, demonstrating consistent profitability.

• Announced a $10 million share repurchase program and continued business simplification, including the sale of reverse assets.

• Continued investment in technology, AI, and process optimization to enhance customer experience and operational efficiency.

Financial highlights

• Total GAAP revenue increased 9% to $1.1 billion year-over-year; Q4 revenue up 25% year-over-year and 6% sequentially.

• Adjusted revenue up 11% YoY to $993 million in FY 2025.

• Book value per share rose to $74 at Q4 2025, up over $17 year-over-year.

• Adjusted pre-tax income for FY 2025 was $82 million; Q4 2025 adjusted pre-tax income was $8.8 million.

• Originations volume up 44% year-over-year, outpacing industry growth of 18%.

Outlook and guidance

• 2026 adjusted ROE guidance is 13%-15% (16%-18% excluding valuation allowance release).

• Servicing UPB growth expected between 5%-15% in 2026, despite non-renewal of the Rithm contract.

• Effective tax rate for 2026 expected to be 28%-30%.

• Anticipates continued strong MSR hedge effectiveness and expense control aligned with revenue growth.

• Raised new capital to support growth and deleveraging.