Thank you, and good morning, everyone. I would like to thank you for joining us today for Rithm Capital's Second Quarter 2025 Earnings Call. Joining me today are Michael Nierenberg, Chairman, CEO and President of Rithm Capital; Nick Santoro, Chief Financial Officer of Rithm Capital; and Baron Silverstein, President of Newrez. Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rithm Capital website. If you've not already done so, I'd encourage you to download the presentation now. I would like to point out that certain statements made today will be forward-looking statements. These statements, by their nature, are uncertain and may differ materially from actual results. I encourage you to review the disclaimers in our press release and earnings supplement regarding forward-looking statements and to review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non-GAAP financial measures during today's call. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our earnings supplement. And with that, I will turn the call over to Michael.

Thanks, Emma. Good morning, everyone, and welcome to our second quarter earnings call. The company had a successful quarter, with strong performance across all our business lines and subsidiaries. On the origination side, Newrez and Genesis, with Newrez being our mortgage company and Genesis our RTL lender, are industry leaders. Genesis just had a record production quarter. Since acquiring Genesis in 2022, we have more than doubled origination and increased earnings threefold. Newrez continues to expand, and we've added third-party servicing to the platform, bringing our total servicing over $850 billion. Our investment teams at Sculptor and Rithm Asset Management are experiencing inflows across the board, particularly in real estate and asset-based finance products. Rithm stands out for its ability to source products, as we also create our own assets, controlling origination and servicing. Recently, we announced a significant SMA at the Rithm Asset Management level with two large institutional investors on our RTL product, which could lead to $1.5 billion in loans moving forward. Looking ahead, we aim to grow our asset management platform, prioritizing performance and earning the trust of our investors. We offer a range of fund products tailored to meet investor needs and will continue to expand where we see potential advantages. I'm excited about our business and the growth of our outstanding asset management division. Review our results; they are impressive. In terms of M&A, we have a strong pipeline and are focused on expanding our credit and origination businesses while creating value for our shareholders and limited partners. We are committed to growing earnings and leveraging synergies where possible. Strong results lead to increased AUM and higher equity prices. I will now refer to the supplement posted online, starting on Page 3. Between our externally managed assets of $36 billion and the Rithm balance sheet, we manage $80 billion in assets, supported by nearly $8 billion of permanent capital. Since inception, we've paid out over $6 billion in dividends to our common and preferred equity holders. If you consider this in relation to shares, it implies a stock price around $25. Our earnings available for distribution show a 59% growth since the first quarter of 2021. We will continue to expand our asset management business and focus on acquiring origination businesses. Our mortgage servicer ranks as the third largest in the United States, while our origination business is among the top five. Genesis Capital, which we acquired in 2022, is now the second-largest RTL lender. Rithm Property Trust, formerly Great Ajax, is our externally managed mortgage REIT, and we've been working on increasing value within that brand over time. Adoor, our single-family rental business with about 4,000 units, will also grow when rates come down. On Page 4, our financial highlights show a strong quarter with a GAAP net income of $283.9 million, or $0.53 per diluted share, and a 17% return on equity. Our earnings available for distribution was $291.1 million, or $0.54 per diluted share, yielding an 18% return on equity. Our book value increased to $6.7 billion, or $12.71, from the previous $12.39. Our dividend yield remains at 8.9%, with a payout of $0.25. We concluded the quarter with a record cash and liquidity amount of $2.1 billion. We are keen to extract real value from what we have built at Rithm, considering our strong asset management business. Looking at Page 6, if Mr. Cooper trades at 2x book value, Newrez would be valued at $8.3 billion. Valuing the investment portfolio at 1x book would be $1.1 billion, and valuing Genesis at 1.3x book yields $760 million. If we assess the asset management segment at higher multiples, it could amount to $1.8 billion, totaling $11.9 billion and implying a stock price exceeding $20. While we aren't at that valuation today, I believe we are undervalued in the marketplace. On Page 7, Rithm Asset Management, inclusive of Sculptor, boasts a variety of products for our investors. We have solid ABF mandates and are driven to scale our credit business. Our real estate initiatives are also progressing, and we are patiently growing Rithm Property Trust focused on commercial real estate. The multi-strategy fund at Sculptor has nearly $9 billion in AUM with outstanding performance. Recently, we launched energy transition funds, and we have product offerings that cater to most investors seeking varied solutions. Potential growth areas for us include direct lending and insurance, along with private equity and infrastructure investments. On Page 8, reviewing the quarter, Genesis reported a record of roughly $1.25 billion in volume and continues to gain new sponsorships. Rithm Asset Management saw a $3.5 billion increase in AUM, maintaining excellent fundraising momentum across our various offerings and strong performance in the second quarter. We also entered into a recent SMA for $1.5 billion in RTL loans. Newrez's mortgage company results are solid with an average return on equity around 20%. We are actively increasing third-party servicing and exploring strategic initiatives to drive additional earnings, which Baron will discuss regarding technology efforts. In our investment portfolio, we executed a non-QM securitization and invested $2.2 billion in attractive residential and mortgage assets during the quarter. Looking at the macroeconomic landscape, while there was some concern earlier in the quarter due to geopolitical risks, many companies reported favorable earnings, leading to expectations of better earnings going forward. We believe a couple of rate cuts are probable this year. The administration is negotiating trade deals, which should help diminish policy uncertainties. Despite potential market fluctuations, we see optimism, particularly with lower credit spreads benefiting products we invest in. Our recent strategy has involved long-term rate steepeners, anticipating a continued steepening of the yield curve when rates cut. The government must issue considerable debt to fund deficits, which will likely contribute to this steepening yield curve. We have several highlights I'd like to touch on before handing it back to Baron. Genesis is a leader in the RTL market with ambitions for further growth. We've significantly upped our origination from about $1.5 billion to over $4 billion since the acquisition. We must be cautious about credit risk moving forward. We've been vocal about our desire to expand our asset management business, especially in light of favorable valuations compared to current trading multiples. Rithm Property Trust, though small currently, has the potential for growth through M&A. This approach mirrors our initial capital build-up for New Residential, and we anticipate similar success with Rithm Property Trust. We are also enthusiastic about our $200 million SPAC, presenting a $1.5 billion buying power, and we continuously search for acquisition opportunities in financial services and energy transition sectors. Overall, whether in the mortgage company or any of our other sectors, results are paramount. Strong performance will lead to increased AUM and hopefully a re-evaluation of our company's worth as we pursue growth.

Great. Thank you, Michael. Good morning, everyone. Starting on Slide 18. Another great quarter. And as Michael mentioned, as we execute on our '25 growth strategy, we had wins in recapture, growth of our third-party fee-based servicing business and efficiencies driven by our Rezi AI initiatives. Our second quarter pretax income, excluding mark-to-market, was approximately $275 million, up 2% quarter-over-quarter and 20% year-over-year and delivered a 19% ROE for the quarter. These results continue to show the power of our platform really through our ability to drive consistent earnings with the results first ethos and a focus on organic growth and adding new partnerships and Michael continues to talk about opportunistic acquisitions. Turning to Slide 19. Our originations business remained in growth mode. We're now the fourth largest originator with $16 billion in funded volume, which is up 38% over last quarter. And while market competition continues to drive margin compression, our disciplined focus on profitable growth allowed us to opportunistically pick up market share while maximizing PTI and ROE for the quarter. We also expect future growth without having to chase volume through price. And this is evidenced by the launch of our Newrez Direct platform, which is focused on purchase recapture and a digital realtor partnership, allowing us to better support consumers through their home buying journey. Turning to Slide 20, our platform investments can also drive gains in recapture, right, as we deliver on our brand promise to maximize customer retention. While a reduction in rates would benefit overall origination volumes, our momentum in connecting with our consumers on purchase transactions and home equity products is key to our balanced and sustainable growth in any market. Our recapture strategy is now being driven by our new Chief Commercial Officer, Leslie Gillin, who was previously Chief Marketing Officer at JPMorgan, and she joined us this month. Customer retention remains a top growth strategy for us, and we're committed to delivering exceptional customer experience that differentiates our platform versus our competition. Moving to Slide 21 and continuing the theme of opportunities, we offer a differentiated product strategy through our manufacturing capabilities and non-agency assets. And when you couple that with our special servicing expertise, we're able to support clients and maximize the performance of their investments. We are gaining market share in non-QM originations, but expect to see similar growth in both home equity and our prime Jumbo products. Our partnership with Rithm and third-party servicing clients are the strength of our franchise, as shown in our ability to retain 98% of the clients we service for today. Moving to Slide 22. Our servicing business continues to perform well with $234 million of pretax income, which is up 5% year-over-year. Our special servicing platform is the best in the business, and we continue to gain market share, as shown by increases in our servicing balances of 7% quarter-over-quarter and 22% year-over-year. These results were driven by adding 10 new clients in the second quarter, and we boarded $61 billion since the beginning of the year. We continue to see opportunities to grow whether through increasing wallet share with our existing clients or acquisition opportunities of both portfolios or operating platforms. Our performance across the servicing business is also driven by our operational efficiency enabled by our proprietary technology and scale that drives our cost leadership at a fully loaded $142 cost per loan. Finally, on Slide 23, our technology enhancements and AI initiatives are continuing to drive our costs lower. We are starting to see significant gains from our Rezi AI investments. These initial tools are not only driving returns, but also focused on homeowner experience, up-leveling our operational workflow and powering our predictive analytics. We have a robust road map, and this development is being driven by our new CIO, Brian Woodring, previously Chief Technology Officer at Rocket, who joined us last quarter. I continue to believe our business is as best positioned as it ever has been, and I look forward to sharing the next chapter of the Newrez growth story all with you. Thank you. Back to you, Michael.

Thanks, Baron. Operator, why don't we turn it back to you for some Q&A. Thank you.

I wanted to start with a question on Newrez. Any updated thoughts on when or if you might do something there in terms of listing? And then just on that Slide 6, there are obviously a lot of other things that you're looking at as well. So anything to comment on there in terms of unlocking value?

Yes. We have focused a lot on improving our stock price, which we believe is currently undervalued. At this time, we are not planning to list the company separately, as our focus is on growing the business. We've made significant investments in our team, including two key hires in the last quarter, and we are committed to enhancing our earnings. As we expand our services in third-party support, which the team has excelled at, we expect to see an increase in the company's perceived value. We face challenges similar to those of larger asset management firms, which typically have narratives surrounding their various businesses. We aim to build our origination businesses, and as I mentioned earlier, ABF is becoming more popular. We are increasing our activity in the non-QM market, which has strong demand for ABF funds. The Jumbo product will also see growth. There is currently uncertainty regarding potential government changes affecting Fannie and Freddie, which we view as an opportunity moving forward. Our goal for the mortgage company is to continue growing and achieve higher returns on equity while being strategic in our actions. As Baron mentioned, we are considering bulk purchases, but we're cautious about buying bulk MSRs at high multiples. Moving forward, a key factor in differentiating our business will be our asset management strategy. We are exploring options to expand our credit segment and our involvement in insurance, while being mindful of our valuation expectations for acquisitions. We plan to pursue smaller, strategic purchases that will help enhance our overall platform.

Okay, that's helpful. Just to follow up on the insurance aspect, are there any insurance companies you're considering for acquisition? Also, could the SPAC be involved in that, or is that something that pertains to Rithm?

I think on the insurance side, it's likely going to happen at Rithm. Our M&A team has been at it. We've looked at insurance for the past number of years. Hard to get your arms around from a valuation standpoint. While saying that, there are some opportunities and some things that we're working on where we could potentially acquire either an insurance business or some company that has an insurance business and grow it. So the idea for us would be to do something a little bit smaller and then grow it rather than go all in on an insurance business that is already full scaled and trading at too high of a premium. And then on the SPAC front, it's wide open to look at pretty much anything right now.

So there's been a bunch of change in the mortgage market in recent quarters. Rates remain elevated. We've seen some M&A with smaller ones out there. Can you just share how that might impact Newrez's strategy as it relates to the channels you're most focused on penetrating across retail, broker and correspondent as you are involved in all 3 and just where you might expect to lean into most and drive that incremental growth you've been talking about?

I think the growth is going to come from our non-QM business, which has experienced significant growth over the past quarter. We have opened new origination channels through both correspondent and wholesale methods. For instance, last year, we did around $1.5 billion to $2 billion, and this year, we're aiming to increase that.

Our forecast is up to $4 billion.

An example of where we are likely to significantly increase origination is related to the relative value of our product. In the ABF space, we're making progress. Baron mentioned two key new hires for our business: Leslie Gillin from Chase, who is focused on growth in our origination businesses and enhancing consumer outcomes, and Brian from Rocket, who is concentrating on technology, AI, and creating efficiencies or technology savings for us. Regarding M&A, we acquired a company last year and currently feel we have everything we need in that area. However, if an opportunity arises that could enhance our operations, we will pursue it. Additionally, we're focused on finding ways to reduce our servicing costs. Baron, could you provide some insights on that?

Yes. On Slide 23, we highlighted some of the initial wins from our technology enhancements and various AI initiatives. Whether it's related to chatbots, telephony, or operational workflows, we've integrated our proprietary technology and partnered with other technology providers to drive these initiatives, resulting in significant cost benefits. Looking at our roadmap, we expect to continue seeing substantial benefits from our AI initiatives and our platform.

Great. Appreciate that. And then just a second question for me on the value prop and optimizing Rithm's corporate structure. What do you view as the most logical and possible ways to do so over the near to intermediate term? What could that look like? Based on your answer to a prior question, it seems like the newer spend doesn't seem to be a near-term event. So just curious on kind of what you're looking at on the corporate structure standpoint.

We are currently assessing the potential of Rithm Asset Management and the advantages of establishing a C-Corp. In pursuing these options, it is crucial for us to achieve scale across all areas of our business. Specifically, on the REIT side, we need it to be substantial enough to function as a standalone entity, similar to what Blackstone has accomplished with BXMT and their larger operations. While we do not consider ourselves Blackstone, we are aiming for a comparable structure. The plan involves having a REIT, a C-Corp, and fully owned subsidiaries in our asset management sectors. It is essential for us to enhance scale on the REIT side to facilitate the creation of the C-Corp in asset management while also increasing free revenue earnings on that side. All of these factors remain part of our ongoing strategy.

How do you guys think about capital allocation across the business right now, the flexibility to maybe move capital from one segment to the other? I mean, is the partnership at Genesis going to support allocating capital to other segments maybe more easily or something? And do you feel like any of the four segments would get valued higher in the market if they operated with more leverage?

It's an interesting question. When we look at Rithm, it's important to consider whether to separate the mortgage company from Genesis or vice versa. All of our corporate earnings are viewed as a funnel, allowing us to allocate capital to the segments that we believe will yield the best returns for our shareholders and optimal investment outcomes for our limited partners. Regarding Genesis, we ended the quarter with a record cash and liquidity balance of $2.1 billion. We see growth potential in Genesis. It's becoming increasingly competitive since many limited partners are interested in this type of product. Additionally, we're noticing a shift among some retail loan originators towards a more concentrated effort or a desire to develop this product. We want to be deliberate with our focus, particularly on credit, and consider the returns. We're open to various strategies rather than committing to just one. If there’s an opportunity for M&A within the Genesis business, we will pursue it. We currently lack some offerings on the lending side, such as a product similar to OneMain Financial, which would enhance our consumer business. To summarize, the capital goes into the funnel, which then distributes it across different platforms to bolster the asset management business and other ventures. For instance, we support the Sculptor CLO business, where Rithm typically takes about 50% equity in each CLO deal. We plan to introduce CLO equity funds at some point, but that's been our approach over the past year, providing substantial support for expanding various investment strategies as well as our portfolio companies.

Yes. Good stuff. Good response. I mean how do you guys think rate cuts from the Fed will drive the pace of capital raising, both for Sculptor and for the other diversified asset managers out there? I mean, do you think lower rates will potentially reduce the expected returns and raise valuations for the asset classes that Sculptor competes in?

Raising capital is definitely a full-time job. If you consider the current state of asset management, many of the largest asset managers are focusing on growth in wealth channels and retail. There have been articles discussing the future of the 401(k) market and its accessibility to large asset managers. In terms of capital formation, I've traveled around the world several times in the past two years with some of my colleagues. Part of our efforts involve building our brand, and another part is evaluating the range of products we offer to limited partners and how they fit into today’s market. Regarding lower rates, I believe they will remain low in the short term, which could support financing. However, in the longer term, this might reduce the overall asset yields, especially if they are based on short-term rates. Our strategy will continue to center on our core competencies. Our experience in asset-based finance is unparalleled, and our team has worked together for over 30 years. It’s uncertain, but I think spreads on mortgage products might narrow since they are relatively affordable compared to corporate options. However, generally speaking, significant drops in yields may not be advantageous for fixed income investors.

Yes. Good stuff. If I could sneak in one more. The $1.7 billion that was raised at Sculptor in the quarter, which funds or strategies were those directed towards?

The funds are more broad-based. It could be something in the real estate business. It could be something around credit. And from a specific standpoint, the real estate business, I think looking at my Q1 comments was north of $3 billion there. Those guys have just knocked it out of the park. And not just from an AUM standpoint, the results are great. Credit business continues to see inflows. The CLO business continues to grow. I pointed out that at the Rithm level, we continue to work in partnerships supporting that business as well.

I have a couple. I guess, first on Slide 21, the non-QM or non-agency growth is pretty significant in the back half. Just trying to understand if that is a function of potential GSE reform? Or is that more just opportunity you see given kind of where rates in the housing market are?

This is opportunistic, right, from where we are that we're just going to continue to see momentum, right? We've grown out our wholesale business. We've basically penetrated and grown our correspondent acquisitions and our direct originations. It's really just driving where we are. There is a price competitive nature to it. Michael talked about the demand in the industry and where we're getting liquidity. So I would tell you it's a combination of all of those.

Okay. That's helpful. And then if we had a movement on GSE reform, I think non-QM would pretty clearly be a market opportunity for you and your competitors. That growth could be even larger potentially? Or would that wouldn't be something that would happen this year? We'd be kind of looking longer term?

Yes. I mean, it would obviously be for what I'll call the non-agency products, would be a very, very significant opportunity. We're already looking at those opportunities today on certain agency-eligible products. So absolutely, I agree. Yes.

Okay. Got it. And then if I could follow up, I think with Bose's question to Mike on the insurance M&A, what type of insurance property are you looking to buy? I just didn't understand if it was something mortgage-related or more broadly in the insurance area.

It's more broad in the insurance area. We've looked at insurance for years, right? I mean it makes sense when you think about our manufacturing capability to have these long-dated liabilities. So it could be P&C; it could be life and annuities type stuff, but we're always on the hunt. Again, it won't be something that's as scaled as some of the larger asset managers, but I feel like we're getting closer on a so-called platform to be able to launch insurance products that would again help fund some of the things that we do here at Rithm.

Okay. So it's like a liability funding mechanism for your asset manager? Got it.

Correct.

All right. Can I have one more, if I can. This is all helpful. Just on credit, and I think this is for Mike. But you said you're careful on credit. And of course, you are, but spreads are incredibly tight. Are there any areas that are kind of on the watch list for you right now?

Yes. I believe credit spreads are very well supported, indicating a strong credit market, especially in the corporate sector. When considering credit and Rithm Asset Management, whether at the Sculptor or Rithm level, our goal is to offer a comprehensive range of products to LPs, as not all LPs are interested in multiple offerings from the same provider. We are focusing on building out certain credit initiatives, including direct lending. Sculptor has been engaged in both opportunistic and regular credit strategies since our inception. When I evaluate the mortgage credit markets, I find them to be quite appealing compared to corporate credit. My comments primarily pertain to the corporate credit side, particularly away from underwriting. We have competitive products available for LPs, but the market is quite saturated. The key challenge for Rithm is how we can generate alpha compared to large asset managers who have been established for a long time and where some options might just serve as beta plays for various LPs. I believe there is a place for us, but it ultimately comes down to the products we can provide.

Hoping to talk a little bit more about the SMA for the residential transition lending. As you think about that, how much of kind of the new production kind of goes in there? And how do you think about the balance of third-party funds versus balance sheet? And then how replicable is that kind of across your other asset generation assets?

It's a great question, Doug. When we evaluate our balance sheet against investing in funds, we recognize the necessity of doing both in order to maintain and enhance earnings at the corporate level. This SMA has been a relationship we've been cultivating for a couple of years now, and we are very excited about it. We believe this could pave the way for additional opportunities to attract third-party capital, whether through funds, co-investments, or even in mergers and acquisitions where we can collaborate with partners. This reflects our broader strategy moving forward. For Rithm, the platform's growth must occur on both fronts: the fund side and maintaining a manageable balance sheet. Our preference is to allocate as much as possible to funds, as this provides a more effective means of financing our operations, while still preserving corporate earnings because achieving scale is crucial. Over the next few years, you can expect to see growth in both earnings and funding mechanisms, and this ties back to the questions about how we are approaching balance sheet funding. So, you can anticipate a blend of both strategies.

Great. As you've discussed scaling the REIT, how do you plan to raise capital at the Rithm level to facilitate that? How would you approach scaling the REIT?

When we consider the REIT business, using Rithm Property Trust as an example, we started with $1 billion in capital and have grown to nearly $8 billion. Currently, Rithm Property Trust operates with $300 million in capital, and we do not plan to raise more capital at this time given the stock price around $2.70. However, we believe there is a substantial opportunity in commercial real estate that could be very appealing. We need to strategically manage our capital deployment. For any significant transactions, it is likely that we would seek third-party capital and partners, which differs from our earlier approach of handling most activities independently. In the past, we did collaborate with some larger alternative managers, but moving forward, our new partners will probably be large-scale limited partners who can support the growth of our business, similar to trends we've seen with larger alternative investment firms.

Just one follow-up on that strategic partnership for the residential transition loans. And it sounds like it's an SMA kind of vehicle there. Could you talk a little bit more about the potential economics there? Is this something where Rithm gets a management fee? And could there also be performance fees related to such a thing?

As you consider our strategy moving forward, it is important to understand that our focus on establishing strategic relationships and partnerships is crucial, particularly as we seek third-party capital to enhance our business and open new opportunities. As a REIT distributing nearly $550 million annually in dividends, retaining capital is a challenge, and we will continuously need additional capital until we achieve a critical mass. This ties back to earlier discussions regarding our capital structure, whether as a C-Corp or REIT, and our efforts to retain more earnings. Utilizing third-party capital will assist us in this endeavor. Regarding the funds business, we are observing an influx of management fees, and while this is not specific to Rithm, we are focused on both management and performance fees as part of our overall strategy.

Got you. Great. Very helpful there. And just one follow-up, if I may, and this is just another follow-up on the potential M&A there, and you talked about insurance being a potential area. It sounds like if there's going to be a pursuit of liability funding kind of businesses, would this also potentially include like fixed annuity platforms, something that we see in other alternative managers engage in as well?

It could definitely happen. We need to begin somewhere. As I mentioned, we cannot spend money on a fully scaled insurance business right now at current valuation levels, and we believe it wouldn't be in the best interest of our shareholders either. Therefore, we will have to start from a different point, which we think we can accomplish, and then expand in the same way we have with several of our other businesses.

This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks.

Well, thanks to everybody for joining the call this morning. Thanks to all of you for your questions. We look forward to updating you throughout the quarter and next quarter and hopefully continue to put up the same wonderful results that we did this quarter. Enjoy the rest of the summer, everybody. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.