Executive Summary
Ellington Financial Inc (0A26.L) delivered a solid Q4 2024 bottom line, with net income of $30.1 million and earnings per share of $0.34 on revenue of $66.1 million. The quarter showed a strong bottom-line result despite a substantial interest expense of $68.6 million, underscoring the company’s ability to generate earnings from its diversified mortgage-related asset base, including RMBS/CMBS and related securities. YoY revenue declined about 22.1% on a reported basis, while QoQ revenue rose 8.4%, reflecting ongoing portfolio repositioning and credit/macro influences that impact earnings stability in a leveraged mortgage finance vehicle.
Balance sheet strength is evident in the scale of long-term investments (~$15.45 billion) and a solid equity base (~$1.57 billion). However, cash flow metrics remained challenging in the quarter: operating cash flow was negative ($-140.8 million) and free cash flow was also negative, while financing activities generated a net inflow of $742.8 million to support the dividend and balance-sheet needs. The company carries a high leverage profile with a debt ratio of 0.871 and a debt-to-equity ratio of 9.04, and it pays a dividend yield of about 3.9%. The payout ratio (~1.41x) implies the quarterly distribution is largely funded from sources beyond GAAP earnings, consistent with mREIT-style capital deployment but warranting scrutiny of sustainability amid changing rate environments.
Looking ahead, Ellington’s valuation metrics (P/B ~0.70, P/E ~9.1) suggest the stock trades at a discount to book value and earnings, offering upside if earnings generation stabilizes and capital deployment remains disciplined. The absence of explicit management guidance in the provided data means investors should monitor rate trends, portfolio repositioning, and financing costs as primary drivers of future quarterly results.
Key Performance Indicators
QoQ: 25.58% | YoY:-66.07%
Key Insights
Revenue: $66.084 million in Q4 2024 (YoY -22.1%, QoQ +8.4%).
Gross Profit: $66.084 million (margin effectively 100% in reported figures).
Operating Income: $20.16 million (YoY -66.1%, QoQ +25.6%).
Net Income: $30.112 million (YoY +61.9%, QoQ +30.9%).
EPS: $0.34 (YoY +88.9%, QoQ +78.95%).
Gross Profit Margin: 1.00 (reported).
Operating Margin: 0.3051.
Net Profit Margin: 0.4557.
Effective Tax Rate: 0.0197 (prox).
ROA: 0.00185; ROE: 0.0192; ROCE: 0.00548.
Debt Ratio: 0.871; Debt/Equity: 9.04; Long...
Financial Highlights
Revenue: $66.084 million in Q4 2024 (YoY -22.1%, QoQ +8.4%).
Gross Profit: $66.084 million (margin effectively 100% in reported figures).
Operating Income: $20.16 million (YoY -66.1%, QoQ +25.6%).
Net Income: $30.112 million (YoY +61.9%, QoQ +30.9%).
EPS: $0.34 (YoY +88.9%, QoQ +78.95%).
Gross Profit Margin: 1.00 (reported).
Operating Margin: 0.3051.
Net Profit Margin: 0.4557.
Effective Tax Rate: 0.0197 (prox).
ROA: 0.00185; ROE: 0.0192; ROCE: 0.00548.
Debt Ratio: 0.871; Debt/Equity: 9.04; Long-Term Debt to Capitalization: 0.864; Total Debt to Capitalization: 0.900.
Dividend Yield: 3.87%; P/B: 0.696; P/E: 9.08; Price/Sales: 7.02; Price/FCF: 3.66.
Dividends Paid: consistent with mREIT model; Payout ratio: 1.407.
Cash Flow (CFO): $(140.8) million for the quarter; Free Cash Flow: $(140.8) million.
Cash at End of Period: $208.95 million; Cash at Beginning: $228.30 million.
Total Assets: $16.317 billion; Total Liabilities: $14.726 billion; Total Stockholders’ Equity: $1.570 billion.
Anti‑cyclical positioning in a volatile rate cycle suggested by continued heavy leverage with net debt of $(192.4) million (negative net debt).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
66.08M |
-22.12% |
8.43% |
| Gross Profit |
66.08M |
-5.11% |
8.43% |
| Operating Income |
20.16M |
-66.07% |
25.58% |
| Net Income |
30.11M |
61.88% |
30.88% |
| EPS |
0.34 |
88.89% |
78.95% |
Key Financial Ratios
operatingProfitMargin
57.5%
operatingCashFlowPerShare
$3.3
freeCashFlowPerShare
$3.3
dividendPayoutRatio
140.7%
Management Commentary
No earnings call transcript data provided for QQ4 2024. As a result, quotes and management themes from the call could not be incorporated. If transcript data become available, key themes would likely cover portfolio strategy (RMBS/CMBS mix, hedging activity, and securitization opportunities), capital deployment (dividend policy, buybacks, and balance-sheet optimization), and risk management in a rising-rate environment.
Transcript data not available for QQ4 2024.
— Management
Transcript data not available for QQ4 2024.
— Management
Forward Guidance
No explicit forward guidance was published in the provided data. Based on the trailing results and sector dynamics, the key factors that will shape Ellington’s trajectory include: (i) sensitivity of net interest income to the rate environment and the cost of funds given elevated debt leverage; (ii) portfolio repositioning opportunities in RMBS/CMBS and related derivatives; (iii) ongoing capital deployment decisions (dividends, potential share repurchases, and financing structure); (iv) liquidity management given negative operating cash flow in the quarter and reliance on financing activity to fund distributions. Investors should monitor management commentary on expected changes in leverage strategy, hedging effectiveness, and any catalyst from new securitizations or asset purchases.