Onity Group Inc. · NYSE:ONIT
Onity — Q2 2025 Earnings Presentation
43 slides from Onity's earnings presentation, Aug 5, 2025
Slide 1: Business Update Second Quarter 2025
Business Update Second Quarter 2025 August 5, 2025 © 2025 Onity Group Inc. All rights reserved.
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING STATEMENTS NON-GAAP FINANCIAL MEASURES This presentation contains forward-looking statements within the the trading price of our securities or our financial condition; breach or This presentation contains references to adjusted pre-tax income (loss) meaning of Section 27A
Slide 3: Delivered strong second quarter results
Delivered strong second quarter results Sustained, robust net income is driving book value growth, demonstrating our sound strategy and high-caliber execution Balanced business is consistently delivering sustainable results across Servicing and Originations, even amid market volatility Reaffirming a
Slide 4: Steady financial performance amid market uncertainty and volatility
Steady financial performance amid market uncertainty and volatility Strong Operating Q4’24Performance Delivering Profitable Growth Second Quarter 2025 vs Q2’24 Second Quarter 2025 FY’24 vs Q2’24 GAAP Net Income* $20M 17% ROE Originations $9.4B +35% YoY $2.40 Diluted EPS Adjusted 11th quarter of Serv
Slide 5: Demonstrated resiliency has enabled us to navigate elevated interest rates and economic uncertainty
Demonstrated resiliency has enabled us to successfully navigate elevated interest rates and economic uncertainty Prior Expectations What Occurred in Q2 Outlook Market Continued interest rate and market Market volatility impaired gain on Continued volatility and uncertain volatility volatility will d
Slide 6: Balanced business designed to perform well in high and low interest rates
Balanced business designed to perform well in high and low interest rates Originations and Servicing Impact of market scenarios complement each other on profitability Adjusted Pre-tax Income(a) 40 Rates Down Rates Up 9 27 Originations Originations Forward Owned Servicing 22 31 Servicing Reverse Owne
Slide 7: Achieved UPB growth QoQ and YoY, further reinforcing our growth trajectory
Achieved UPB growth QoQ and YoY, further reinforcing our growth trajectory Servicing UPB rose steadily driven Growth in MSR offsets client portfolio changes by growth in MSR and opportunistic asset management Owned Servicing Avg UPB Servicing Ending UPB 153 36 310 304 147 (6) (10) 132 (15) Opportuni
Slide 8: Originations driving consistent profitable growth
Originations driving consistent profitable growth MSR originations up 35% YoY, exceeding Multi-channel strategy in Originations with a industry growth of 23%(a) focus on B2B and customer retention 9.4 • Originations drives MSR and subservicing replenishment and growth through all market cycles consi
Slide 9: Achieved top-tier recapture performance
Achieved top-tier recapture performance Consumer Direct funded Refinance recapture rate 1.5x industry volume up 2.4x YoY average(b) and leading peers in Q2’25 60% Q2'25 LTM Q2'25 40% 384 20% 158 ($M) 0% ICE Large Large ONIT Large Q2'24 Q2'25 Avg Nonbank 1 Nonbank 2 Nonbank 3 7.0% 6.8% ONIT includes
Slide 10: Top-tier servicing performance delivers value for customers and investors
Top-tier servicing performance delivers value for customers and investors Top-Tier Investor Performance(a) Customer Experience(c) 4.6 4.0 Positive Experience Positive Experience Call Center Loan Boarding 55 Commitment to Competitive Cost Technology Structure(b) Performing Non-Performing Loans Loans
Slide 11: Expanding our AI powered platform to grow revenue, reduce cost, and drive service excellence
Expanding our AI powered platform to grow revenue, reduce cost, and drive service excellence ONITY Robotics Natural Language Processing (NLP) Drive Cost Leadership $ Elevate the digital customer experience Power intelligent and utility communication Accelerate Revenue Growth Smarter decisions & meas
Slide 12: Leveraging leading-edge technologies to create value for all stakeholders
Leveraging leading-edge technologies to create value for all stakeholders Outcomes Today’s Reality Tomorrow’s Vision ✓ Robotic Process Automation (RPA) performing 190+ $ Integrate RPA, LLMs, Drive Cost processes, completing the work of ~400 FTE and ML across all Leadership ✓ Machine Learning (ML) pr
Slide 13: Strong growth in net income YoY drives book value increase
Strong growth in net income YoY drives book value increase GAAP ROE up ~8pp YoY on Book value per share up +$10M net income ~$3 YoY 18.7% $60 17.4% $58 $57 9.6% Q2'24 Q1'25 Q2'25 Q2'24 Q1'25 Q2'25 $10.5M $21.1M $20.5M $1.33 $2.50 $2.40 GAAP Net Income Attributable to Diluted Earnings Common Stockhol
Slide 14: Delivered 11 straight quarters of profitable Adjusted PTI
Delivered 11 straight quarters of profitable Adjusted PTI through mortgage industry seasonality and market volatility Adjusted Pre-Tax Income(a) Q2’25 vs Q2’24 35 32 31 • +$3M 16% increase owned MSR 30 25 • +$4M Corporate debt interest expense 25 23 • ($4M) 15% ownership stake in MAV 20 15% 16 15 CA
Slide 15: Originations delivers consistent profitability despite elevated rates and April volatility
Originations delivers consistent profitability despite elevated rates and April volatility Originations Adjusted Pre-Tax Income(a) 10 10 • Consumer Direct lock volume up 2.5x vs Q2’24 1 9 driving increased pre-tax income 2 3 • Originations quarterly performance impacted by 9 6 April market volatilit
Slide 16: Originations margins rebounded after market volatility
Originations margins rebounded after market volatility Funded volume & revenue margins(a) Revenue margins recover following April volatility Consumer Direct $384M Consumer Direct 385 $298M 500 319 321 $158M 400 300 200 Business-to-Business $8.9B (B2B) $6.6B $6.6B 100 Jan Feb Mar Apr May Jun 22 1H’25
Slide 17: Servicing continues to contribute robust returns
Servicing continues to contribute robust returns with higher UPB growth offset by MSR Runoff and reduced Reverse profitability Servicing Adjusted Pre-Tax Income(a) • Forward owned average servicing UPB up 14% YoY and 4% QoQ 50 4 • Forward servicing revenue +$9M YoY and 38 +$8M QoQ while opex improve
Slide 18: MSR hedge strategy cost-effectively manages interest rate risk
MSR hedge strategy cost-effectively manages interest rate risk MSR valuation adjustments due to rates and Effective hedge strategy and execution assumption changes, net(a) 60 • Hedge strategy has offset interest rate changes effectively since Q1’24 40 Effective hedging strategy • Our performance has
Slide 19: Confirming our Adjusted ROE guidance for 2025
Confirming our Adjusted ROE guidance for 2025 = confirmed guidance Financial Objectives Full-Year 2025 Guidance(b) = updated or new guidance ❖ Sustain Adjusted PTI(a) Adjusted ROE(c) of 16-18% performance Increase total servicing UPB 10+%(d) ❖ Maintain earnings stability High hedge effectiveness to
Slide 20: Focused on accelerating profitable growth and creating value for all stakeholders
© 2 0 2 4 Focused on accelerating profitable growth and creating value for all stakeholders O n i t y G r o ❑ Strong second quarter results and outlook for the year u p I n c . ❑ Balanced and diversified business built to perform through market cycles with A l multiple opportunities for growth l r i
Slide 21: Appendix
Appendix © 2025 Onity Group Inc. All rights reserved. 21
Slide 22: Sound strategy and strong execution are delivering results
Sound strategy and strong execution are delivering results Strategy Balance and Diversification | Prudent Capital-Light Growth | Industry-Leading Cost Structure(a) Top-Tier Operating Performance and Capabilities(b) | Dynamic Asset Management Operating Priorities Differentiate Operating Elevate the C
Slide 23: Delivered 11th straight quarter of positive Adjusted Pre-tax Income
Delivered 11th straight quarter of positive Adjusted Pre-tax Income (Dollars in millions, except per share metrics) Q2’24 Q1’25 Q2’25 Adjusted pre-tax income(a) 32 25 16 MSR valuation adjustments due to rates (17) (2) 6 and assumption changes, net(b) Other notables (2) (14) 0 Income tax benefit (exp
Slide 24: Diversified servicing portfolio mitigates risk
Diversified servicing portfolio mitigates risk MSR to be hedged % of Servicing UPB GAAP MSR Fair Value end of Q2’25 end of period GSE MSR 2,633 ~35% 570 Fannie Subservicing Owned Servicing(a) 249 ~50% ~50% Other Subservicing 1,815 Freddie ($M) MAV Q2'25 (b) Rithm, MAV and other pledged MSR $310B Rev
Slide 25: MSR Valuation
MSR(a) Valuation as of 6/30/2024 as of 3/31/2025 as of 6/30/2025 (Dollars in millions) Total Total Total GSE Gov’t(b) Non-Agency GSE Gov’t(b) Non-Agency GSE Gov’t(b) Non-Agency Retained Retained Retained UPB 91,501 17,416 13,038 121,955 105,665 20,113 12,028 137,805 109,176 21,579 11,694 142,448 Loa
Slide 26: Managing owned MSRs to a targeted investment range
Managing owned MSRs to a targeted investment range (Dollars in billions) Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Forward Owned 121 122 124 124 123 124 135 141 Reverse Owned 8 8 8 8 9 11 12 12 MSR Investment Range Total Owned MSR Servicing(a) Avg UPB 129 130 132 132 132 135 147 153 • $115-135
Slide 27: Scale and diligent cost management maintaining operating efficiency
Scale and diligent cost management maintaining operating efficiency Operating Efficiency by Segment Originations Servicing(a) 50 94% 200 40 150 50% 30 61% 56% 56% 100 37% 52% 52% 34% 34% 34% 20 32% 50 10 0 0 ($M) Q2'22 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 ($M) Q2'22 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Operating
Slide 28: Reverse benefits our balanced business model
Reverse benefits our balanced business model Reverse Combined Adjusted ✓ Creates upside potential on originations market if rates Pre-Tax Income(a) decline $38M ✓ Offers cost-efficient hedge to the forward MSR $23M $24M ✓ Creates product and service breadth for Correspondent clients who offer both f
Slide 29: Dilution controlled by Onity due to updated agreements
Dilution controlled by Onity due to updated agreements As of 6/30/25 Remaining Oaktree Warrant* Settlement Method at Onity’s discretion ONIT Share Price $38.17 Gross Shares Settlement Net Settlement in Shares Net Settlement in Cash Book Value in $M Book Value Share Count Book Value Share Count Book
Slide 30: Condensed Consolidated Balance Sheets (unaudited)
Condensed Consolidated Balance Sheets (unaudited) Assets June 30, March 31, June 30, (Dollars in millions) 2024 2025 2025 Cash and cash equivalents 203 178 194 Restricted cash 46 59 62 Mortgage servicing rights (MSRs), at fair value 2,328 2,547 2,633 Advances, net 551 514 461 Loans held for sale, at
Slide 31: Condensed Balance Sheets Breakdown
Condensed Balance Sheets Breakdown Assets June 30, 2025 Rithm, MAV & other Reverse GNMA All (Dollars in millions) unaudited pledged MSR mortgages EBO others Cash and cash equivalents 194 194 Restricted cash 62 62 Mortgage servicing rights (MSRs), at fair value 2,633 570 2,063 Advances, net 461 461 L
Slide 32: Condensed Consolidated Statements of Operations (unaudited)
Condensed Consolidated Statements of Operations (unaudited) Three months June 30, March 31, June 30, (Dollars in millions) ended 2024 2025 2025 Revenue Servicing and subservicing fees 211 203 211 Gain on reverse loans held for investment and HMBS-related 8 24 12 borrowings, net Gain on loans held fo
Slide 33: Note Regarding Non-GAAP Financial Measures
Note Regarding Non-GAAP Financial Measures In the following slides, we present supplemental information (including reconciliations) relating to certain illustrative adjustments to GAAP pre-tax income (loss) and GAAP pre-tax return on equity. We believe these non-GAAP financial measures provide a use
Slide 34: Notables and Adjusted Pre-tax Income (Loss) Calculation
Notables and Adjusted Pre-tax Income (Loss) Calculation (Dollars in millions) Q2’21 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 I Reported net income (loss) (10) (80) (40) 15 8 (47) 30 11 21 (28) A Income tax benefit (expense) 12 (1) (2) (1) (1) (2) (2) (3) (6) 6 II Reported pre-tax income
Slide 35: Notables and Adjusted Pre-tax Income (Loss) Calculation
Notables and Adjusted Pre-tax Income (Loss) Calculation (Dollars in millions) Q1’25 Q2’25 FY’21 FY’22 FY’23 FY’24 1H’25 I Reported net income (loss) 22 22 18 26 (64) 34 44 A Income tax benefit (expense) 13 (1) 22 1 (6) (5) 12 II Reported pre-tax income (loss) [ I – A ] 9 23 (4) 25 (58) 39 32 Forward
Slide 36: ROE Calculations
ROE Calculations (Dollars in millions) Q2’24 Q1’25 Q2’25 1H’25 I Reported net income (loss) 11 22 22 44 A Preferred stock dividend - (1) (1) (2) II Reported net income (loss) attributable to 11 21 20 42 common stockholders [ I + A ] III Annualized net income (loss) [ II * 4 for qtr.] 42 84 82 83 B B
Slide 37: Q2'25 P&L GAAP to Adjusted Bridge
Q2’25 P&L GAAP to Adjusted Bridge Rithm, MAV & MSR FV Servicing Segment Reverse Other Inter-Segment GAAP Other Pledged Reclass Adjustments Notables Reclass Adjusted (Dollars in millions) MSR Reclass Notables Revenue 217 (30) 5 (1) 1 192 MSR Valuation Adjustments, net (31) (4) (6) (41) Operating Expe
Slide 38: End Notes
End Notes © 2025 Onity Group Inc. All rights reserved. 38
Slide 39: End Notes
End Notes SLIDE 3 SLIDE 9 cont. SLIDE 14 a) Adjusted ROE refers to annualized adjusted PTI return on common b) Onity’s refinance recapture rate by balance (Q3’24 through Q2’25) as a a) See slides 33-37 for discussion of non-GAAP measures; effective in equity; see slides 33-37 for discussion of non-G
Slide 40: End Notes
End Notes SLIDE 18 SLIDE 22 SLIDE 24 a) MSR valuation adjustments that are due to changes in market interest a) See slide 10 for cost structure comparison to peers from MBA’s 2025 a) Includes owned MSRs, reverse mortgage loans (referred to as our rates, valuation inputs or other assumptions, net of
Slide 41: End Notes
End Notes SLIDE 34 & 35 SLIDE 34 & 35 cont. a) MSR valuation adjustments that are due to changes in market interest i) Effective in Q4’24, change in fair value due to interest rates for reverse rates, valuation inputs or other assumptions, net of overall fair value loan buyouts is now recognized as
Slide 42: Abbreviations & Definitions
Abbreviations & Definitions • Adj / Adjusted: Non-GAAP measure of PTI, ROE, revenue, opex (See • HFI: Loans Held for Investment • Perf: Performing Loan slide titled “Note Regarding Non-GAAP Financial Measures”) • HMBS: Home Equity Conversion Mortgage-Backed Securities • PHH: PHH Mortgage Corporation
Slide 43: Customer first. Better together. We say. We do.
Customer first. Better together. We say. We do.