Arbor Realty Trust reported a volatile QQ3 2025 with revenue of $29.65 million, a sharp year-over-year and quarter-over-quarter decline (-81.33% YoY, -90.17% QoQ) accompanied by a negative gross margin (-48.96%) and a modest operating income of $4.19 million. The quarter delivered a robust net income of $38.46 million and diluted earnings per share of $0.20, supported by substantial non-operating income and a favorable tax treatment that produced a net margin of 129.7%. On a QoQ basis, net income rose 12.16% and EPS advanced 66.67%, underscoring quarterly volatility driven by non-operating items and interest expense dynamics. With an EBITDA of $220.96 million and an EBITDARatio of 7.45, the company demonstrated earnings strength at the EBITDA level despite limited revenue. The dividend yield stands at 2.46% and the payout ratio is reported at 1.511x, signaling substantial cash return to shareholders relative to reported net income, which warrants a closer look at recurring cash generation versus one-time or non-cash items. In sum, QQ3 2025 reflects a high-variability earnings profile typical of mortgage REITs in a higher-rate regime, where net income can be influenced by non-operating items and hedging outcomes even as cash flow and dividend policies remain a focal point for investors.
Key Performance Indicators
Revenue
Decreasing
29.65M
QoQ: -90.17% | YoY: -81.33%
Gross Profit
Decreasing
-14.52M
-48.96% margin
QoQ: -105.02% | YoY: -110.08%
Operating Income
Decreasing
4.19M
QoQ: -92.67% | YoY: -95.77%
Net Income
Decreasing
38.46M
QoQ: 12.16% | YoY: -43.86%
EPS
Decreasing
0.20
QoQ: 66.67% | YoY: -35.48%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability metrics show extreme dispersion between operating performance and accounting earnings. Key figures:
- Revenue: $29.652 million; YoY -81.33%, QoQ -90.17%
- Gross Profit: -$14.517 million; Gross Margin -48.96% ( -0.490 )
- Operating Income: $4.189 million; Operating Margin 14.13%
- EBITDA: $220.959 million; EBITDARatio 7.45
- Net Income: $38.463 million; Net Margin 129.71%
- EPS: $0.20; YoY -35.48%, QoQ +66.67%
- Cash flow per share: Operating $0.922; Free Cash Flow $0.922; Cash per share $2.19
- Dividends: Dividend yield 2.46%; Payout ratio (dividend/net income) 1.511x
- Valuation (estimates): P/E 15.38x; P/B 0.79x; P/S 79.78x; EV/EBITDA 8.79x; Price to Free Cash Flows 13.24x
- Leverage and liquidity data: Cash flow and liquidity measures appear favorable on a per-share basis, but explicit balance-sheet leverage metrics are not populated in the provided data; interest expense remains materially high at $184.735 million for the quarter, highlighting debt-service cost in a mortgage REIT construct.
Key takeaway: The quarter exhibits a bifurcated picture—strong EBITDA-driven earnings and cash flow signals versus a dramatically compressed operating revenue base and significant interest burden, creating earnings volatility and a need for closer scrutiny of recurring cash generation versus non-operating gains.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
29.65M
-81.33%
-90.17%
Gross Profit
-14.52M
-110.08%
-105.02%
Operating Income
4.19M
-95.77%
-92.67%
Net Income
38.46M
-43.86%
12.16%
EPS
0.20
-35.48%
66.67%
Key Financial Ratios
Gross Profit Margin
Weak
-0.49%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Fair
14.10%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Weak
1.30%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.28%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
1.28%
Return on equity suggests inefficient capital allocation
P/E Ratio
Fair Value
15.38x
P/E ratio in line with market averages
Price to Book
Undervalued
0.79x
Trading below book value, potential value opportunity or distressed
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