Executive Summary
Ellington Financial Inc delivered QQ3 2024 results reflecting a meaningful year-over-year revenue increase alongside a sharp sequential decline. Reported revenue of $60.95 million for the quarter ended September 30, 2024 rose ~24.8% year over year, driven by higher asset deployment and securitization activity, while operating income was $16.05 million (margin ~26.3%). Net income was reported at $23.01 million with basic earnings per share (EPS) of $0.19 for the quarter. On a QoQ basis, revenue declined by ~28.6%, signaling seasonality or shifts in liquidity deployment and funding costs that began to weigh on quarterly top-line performance. The company’s balance sheet shows a substantial asset base (~$15.96 billion) with a large investment book (long-term investments ~ $15.08 billion) and a net cash position (net debt negative ~$217.7 million). Operating cash flow was negative in the quarter (-$141.69 million), while financing activities generated substantial cash (+$741.54 million), underscoring a reliance on external financing and asset activity to fund operations and distributions. The reported metrics point to a defensive capital allocation stance amid a tight funding environment, with a dividend yield around 3.6% and a price-to-book near 0.71, suggesting potential upside if funding costs stabilize and asset yields compress less than anticipated.
Key Performance Indicators
QoQ: -28.59% | YoY:24.78%
QoQ: -28.59% | YoY:78.37%
QoQ: -66.67% | YoY:78.54%
QoQ: -61.12% | YoY:83.02%
QoQ: -69.35% | YoY:97.71%
Key Insights
Revenue: $60.95m (YoY +24.78%, QoQ -28.59%)
Gross Profit: $60.95m (YoY +78.37%, QoQ -28.59%)
Operating Income: $16.05m (YoY +78.54%, QoQ -66.67%)
Net Income: $23.01m (YoY +83.02%, QoQ -61.12%)
EPS (diluted): $0.19 (YoY +97.71%, QoQ -69.35%)
Operating Margin: ~26.3%
Net Margin: ~38.0%
Interest Expense: $73.65m
Cash from Operations: -$141.69m
Free Cash Flow: -$141.69m
Cash at End of Period: $228.30m
Total Assets: $15.95B
Total Liabilities: $14.33B
Shareholders’ Equity: $1.61B
Dividend Yield: ~3....
Financial Highlights
Revenue: $60.95m (YoY +24.78%, QoQ -28.59%)
Gross Profit: $60.95m (YoY +78.37%, QoQ -28.59%)
Operating Income: $16.05m (YoY +78.54%, QoQ -66.67%)
Net Income: $23.01m (YoY +83.02%, QoQ -61.12%)
EPS (diluted): $0.19 (YoY +97.71%, QoQ -69.35%)
Operating Margin: ~26.3%
Net Margin: ~38.0%
Interest Expense: $73.65m
Cash from Operations: -$141.69m
Free Cash Flow: -$141.69m
Cash at End of Period: $228.30m
Total Assets: $15.95B
Total Liabilities: $14.33B
Shareholders’ Equity: $1.61B
Dividend Yield: ~3.6%
P/B: ~0.71
ROE: ~1.43%
Debt/Equity: ~8.59x
Notes: Some reporting metrics exhibit inconsistencies in the data (e.g., tax expense near zero yet net income > operating income). The figures shown reflect the supplied QQ3 2024 datapoints and should be revisited against the official 10-Q/quarterly filing for precise reconciliation.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
60.95M |
24.78% |
-28.59% |
| Gross Profit |
60.95M |
78.37% |
-28.59% |
| Operating Income |
16.05M |
78.54% |
-66.67% |
| Net Income |
23.01M |
83.02% |
-61.12% |
| EPS |
0.19 |
97.71% |
-69.35% |
Key Financial Ratios
operatingProfitMargin
164.1%
operatingCashFlowPerShare
$-1.17
freeCashFlowPerShare
$-1.17
dividendPayoutRatio
177.7%
Management Commentary
Note: No earnings call transcript was provided in the data set. Consequently, management quotes and verbatim themes are not available. In lieu of direct quotes, here are inferred themes investors typically examine in Ellington Financial’s context:
- Strategy and asset mix: Focus on mortgage-related assets and securitized products; emphasis on diversification of RMBS, CMBS, and related credit strategies.
- Funding and leverage: Management commentary in prior periods has highlighted financing costs and leverage as key levers affecting net interest income and distributions.
- Liquidity and capital deployment: With a large long-term investment book and a net cash position, management may discuss liquidity management, hedging, and deployment opportunities amidst changing rate conditions.
Not available
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Forward Guidance
The provided data set does not include explicit forward guidance from Ellington Financial. Given the quarter’s elevated interest expense and negative operating cash flow, investors should monitor: (1) the trajectory of funding costs and leverage metrics in a rising-rate environment, (2) portfolio yield and duration management for RMBS/CMBS exposures, (3) asset deployment plans and potential accretive acquisitions or restructurings, and (4) distributions policy and dividend sustainability given cash flow dynamics. In a scenario where rates stabilize or decline modestly and securitization spreads compress modestly, there could be a gradual improvement in net interest income and cash generation. Key factors to watch include changes in long-term investment valuations, hedging effectiveness, and any shifts in the company’s funding mix that could influence net debt and liquidity.