NYSE$RWT

Redwood Trust Inc · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Reported financial results for the quarter ended June 30, 2023.

Redwood Trust reported a GAAP net income available to common stockholders of $1 million, or $0.00 per diluted common share, and non-GAAP Earnings Available for Distribution (EAD) of $16 million, or $0.14 per basic common share. The company's GAAP book value per common share was $9.26 at June 30, 2023, a 1.5% decrease from the previous quarter. They established new partnerships and relationships, and saw growth in their operating platforms.

  • GAAP book value per common share was $9.26 at June 30, 2023, a 1.5% decrease from $9.40 per share at March 31, 2023.
  • GAAP net income available to common stockholders of $1 million or $0.00 per diluted common share.
  • Non-GAAP Earnings Available for Distribution (EAD) of $16 million or $0.14 per basic common share.
  • Recourse leverage ratio of 2.2x at June 30, 2023.

Headline financials

Total Revenue

$43.3M

Previous: -$70.5M+161.4%
EPS (adj)

$0.14

Previous: $0.11+27.3%
Economic Return on BV

0.2%

Previous: -8.3%+102.4%
Redwood Investments Recourse Leverage

2.2

Previous: 2.5-12.0%
Free Cash Flow

$2.87M

Previous: -$100M+102.9%
Net Income

$2.87M

Previous: -$100M+102.9%
Operating Income

$7.1M

Previous: -$102M+106.9%
Gross Profit

$38.3M

Previous: -$74M+151.8%
Cash & Equivalents

$357M

Previous: $371M-3.8%
Total Assets

$12.8B

Previous: $13.9B-7.8%

Revenue & EPS history

Redwood Trust · Revenue · Quarterly

$43.3M

Q2 2023-161.4%vs Q2 2022
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Forward guidance

Redwood secured some notable partnership and relationship wins that they believe will support the growth, scale, distribution and earnings power of their operating platforms going forward. With the Fed potentially nearing the end of its historic rate-hike cycle, Redwood expects its strategic relevance to a transforming housing finance sector to rise significantly.

Tailwinds

  • New forward flow jumbo loan relationships are expected to positively contribute to volumes in the third quarter of 2023 and beyond.
  • Strategic partnerships are expected to support growth.
  • Regulatory environment changes for banks may present significant opportunities.
  • End of rate-hike cycle may increase strategic relevance.
  • Expect continued momentum in volume in the third quarter 2023 and beyond.

Headwinds

  • Economic conditions could impact performance.
  • Competition in the housing finance sector.
  • Changes in interest rates.
  • Regulatory changes.
  • Potential fallout from loan pipeline.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

+0.5%

Avg return

Earnings day

+0.1%

Avg return

5 days after

+1.2%

Avg return

30 days after

49%

33 / 68 earnings

Positive

+20.6%

Q4 2025

Best reaction

-9.0%

Q2 2011

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.9%-0.7%-3.6%
Q4 2025+20.6%+17.1%+5.2%
Q3 2025-2.6%-4.4%+0.4%
Q1 2025-6.1%-5.2%-12.2%
Q4 2024-1.2%-1.1%-1.1%
Q3 2024-3.8%-5.0%-5.9%
Q2 2024-3.0%-4.1%+4.1%
Q1 2024+8.6%+11.4%+9.7%
Q4 2023-8.2%-7.9%-4.9%
Q3 2023-7.0%+2.7%+5.5%
Q2 2023+7.1%+8.3%+11.8%
Q1 2023-1.7%-9.7%-7.8%
Q4 2022-5.1%-4.0%-17.0%
Q3 2022+6.5%+5.0%+13.3%
Q2 2022+1.5%-2.9%-4.6%
Q1 2022+10.5%+14.1%+16.3%
Q4 2021-7.3%-11.6%-10.7%
Q3 2021+2.6%+2.7%-1.0%
Q2 2021+3.1%+0.6%+5.7%
Q1 2021+1.3%+5.1%+4.0%
Q4 2020+2.0%+2.0%+9.6%
Q3 2020+3.0%+5.9%+11.2%
Q2 2020+2.1%-1.6%+3.0%
Q1 2020+3.4%-8.1%+74.4%
Q4 2019+1.9%+4.1%-62.9%
Q3 2019-2.2%-2.2%-3.1%
Q2 2019-1.0%-1.5%-1.9%
Q1 2019-0.5%-1.3%-2.2%
Q4 2018-1.1%-2.1%-2.0%
Q3 2018+1.9%+0.8%+0.5%
Q2 2018-2.2%-1.6%+4.8%
Q1 2018+3.9%+3.2%+4.3%
Q4 2017+2.7%+0.4%+0.5%
Q3 2017-3.7%-4.8%-4.5%
Q2 2017-1.8%-1.3%-3.6%
Q1 2017+1.6%-0.9%+2.4%
Q4 2016-3.2%-3.5%-4.0%
Q3 2016+1.1%+6.2%+12.3%
Q2 2016+4.7%+1.5%+0.5%
Q1 2016+3.1%
Q4 2015+10.8%
Q3 2015-3.2%
Q2 2015-5.0%
Q1 2015-1.5%
Q4 2014-1.9%
Q3 2014+3.3%
Q2 2014-0.4%
Q1 2014-8.2%
Q4 2013+2.1%
Q3 2013+1.8%
Q2 2013+10.3%
Q1 2013-2.7%
Q4 2011+1.7%
Q4 2012-2.1%
Q3 2012+2.5%
Q2 2012-0.8%
Q1 2012+3.3%
Q3 2011-3.6%
Q2 2011-9.0%
Q1 2010-1.0%
Q1 2011-0.7%
Q4 2009-1.6%
Q4 2010-1.6%
Q4 2008-1.6%
Q3 2009+2.3%
Q3 2010+2.3%
Q2 2010+2.4%
Q2 2009+2.4%

Discussion

Share your read of this quarter. Sign-in carries your eToro identity.

Join the conversation

Sign in with eToro to post your read of this quarter and vote on others'.

Sign in with eToro