Onity Group Inc.(ONIT) - 2025 Q1 - Quarterly Report

Financial Performance - Net income attributable to common stockholders was $21 million, or$2.68 per share basic and $2.50 diluted [228]. - Revenue for Q1 2025 was$249.8 million, an 11% increase compared to $224.8 million in Q1 2024 [230]. - The company reported a servicing segment income of$33.1 million, down 14% from $38.4 million in the previous quarter [230]. - Total revenue for the three months ended March 31, 2025 increased by$25.0 million, or 11%, compared to the previous quarter, driven by a $26.8 million increase in Servicing revenue [232]. - Originations revenue saw a significant increase of$8.7 million, or 43%, compared to the same period last year, attributed to higher production volume in both Consumer Direct and Correspondent channels [233]. - Total revenue for the Servicing segment reached $221.2 million for the three months ended March 31, 2025, a 14$194.4 million for the same period in 2024 [290]. - Total revenue for the Originations segment for the three months ended March 31, 2025, was $28.6 million, a decrease of 6$30.4 million in the previous quarter [335]. Loan Servicing and Portfolio - The company serviced or subserviced 1.4 million loans with a total UPB of $304.6 billion as of March 31, 2025 [214]. - The average total servicing and subservicing UPB increased by$4.8 billion or 1.6% from the previous quarter and by $13.1 billion or 4.5$304.6 billion as of March 31, 2025, reflecting a 1% increase from $301.7 billion in Q4 2024 [283]. - The servicing portfolio increased to$150.5 billion, a 5% increase from $142.7 billion in Q4 2024 [283]. - The company completed 4.6 thousand loan modifications in Q1 2025, a 7$10.4 billion, a 10% reduction from $11.5 billion in Q1 2024 [283]. - The average servicing UPB increased by 7$175.4 billion compared to $164.3 billion in the previous quarter, contributing to an additional$7.4 million in servicing fee collection [293]. Expenses and Liabilities - Operating expenses for the three months ended March 31, 2025 totaled $119.9 million, a 4$38.9 million, reflecting a $41.1 million runoff and an$18.6 million fair value loss due to input and assumption changes [236]. - Total liabilities decreased by $193.3 million, or 1$284.5 million decrease in HMBS-related borrowings [254]. - Operating expenses for the Servicing segment totaled $68.6 million for the three months ended March 31, 2025, a decrease of 2$69.7 million in the previous quarter [290]. Tax and Equity - The effective tax rate for the three months ended March 31, 2025, was (142.9)%, a decrease from 16.7% in the same period of 2024 [248]. - The income tax benefit for the three months ended March 31, 2025, was primarily driven by a favorable resolution of a prior-year uncertain tax position, resulting in a tax benefit of $13.3 million [249]. - Total stockholders' equity increased by$17.2 million during the three months ended March 31, 2025, primarily due to a net income of $22.1 million for the period [255]. Market Conditions and Future Outlook - The average 30-year fixed rate mortgage increased to 6.83$238.6 million, including $178.0 million of unrestricted cash [356]. - Operating cash flow for the three months ended March 31, 2025, was a net cash outflow of$148 million, primarily due to $159 million net cash paid on loans held for sale [381]. - Financing activities resulted in a cash outflow of$300 million, with $468 million net cash repaid related to reverse HMBS borrowings, partially offset by$309 million from reverse mortgage securitizations [383]. - The company maintains liquidity buffers to manage risks associated with market interest rate conditions and operational risks [357].