Apollo Commercial Real Estate Finance, Inc. is a specialized commercial real estate finance company organized as a mortgage real estate investment trust, or mREIT. Established in 2009 and headquartered at 9 West 57th Street in New York City, the company focuses primarily on the U.S. commercial property market. Its shares ...Apollo Commercial Real Estate Finance, Inc. is a specialized commercial real estate finance company organized as a mortgage real estate investment trust, or mREIT. Established in 2009 and headquartered at 9 West 57th Street in New York City, the company focuses primarily on the U.S. commercial property market. Its shares trade on the New York Stock Exchange under the ticker ARI. Stuart A. Rothstein serves as president, chief executive officer, and a director, while the company operates within the broader Apollo real estate credit ecosystem.
ARI does not function like a traditional property-owning REIT with large operating buildings, retail locations, manufacturing facilities, or an inventory-based product business. Instead, its core activity is providing and managing financing secured by commercial real estate. Its investments may include senior first mortgage loans, subordinate or mezzanine loans, preferred equity or other structured real estate credit exposures, and commercial mortgage-backed securities. The company may originate loans directly, purchase existing loans or securities, hold investments through maturity, and actively manage or dispose of assets as market conditions change. Revenue is therefore primarily associated with interest income, financing spreads, fees, investment gains or losses, and changes in the value of its credit portfolio.
The company’s principal cost structure differs from that of an industrial or consumer business. ARI has no conventional bill of materials, manufacturing supply chain, or physical product cost. Its major economic costs include interest expense on secured and unsecured borrowings, hedging expenses, financing fees, servicing and asset-management costs, professional fees, employee and administrative expenses, and credit-loss provisions. Leverage is an important part of the business model because the company finances a substantial portion of its assets with debt and seeks to earn a spread between asset yields and funding costs. As a result, profitability and book value can be affected materially by interest rates, credit spreads, refinancing conditions, property values, borrower performance, and liquidity in commercial real estate markets.
ARI elected to qualify as a REIT for U.S. federal income tax purposes. Subject to meeting applicable REIT requirements, including distributing at least 90 percent of REIT taxable income to shareholders, the company generally can avoid federal corporate income tax on qualifying distributed income. This structure supports a dividend-oriented investment profile but also limits the amount of earnings that can be retained for balance-sheet growth. The supplied data shows a recent indicated dividend of approximately $4.50 per share and a high reported dividend yield, although dividend figures and yields should be verified against the latest company filings because they can reflect special distributions, timing differences, or data-provider methodology.
Financially, the supplied trailing data indicates a highly leveraged balance sheet, with debt representing a significant share of assets and debt-to-equity reported at approximately 4.5 times. The company’s reported price-to-book ratio is below one, which may indicate that the market price is below reported book value, although mortgage REIT book values can change with interest rates, credit marks, hedges, and property-market conditions. Key risks include borrower defaults, declining commercial property values, tenant and refinancing stress, rising funding costs, interest-rate volatility, concentration in particular property types or geographies, and difficulties selling or financing assets during periods of market disruption. Because ARI is externally managed, reported employee counts may be zero or minimal even though management and operating resources are provided through affiliated or contracted arrangements. Investors should consult the latest annual report, quarterly filings, loan portfolio disclosures, financing agreements, and dividend announcements for current information.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$710.5M
+1.3%
-251.5%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$126.7M
+205.9%
-1.7%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+80.1%
+0.2%
+385.6%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+65.4%
+9.8%
-286.0%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+17.8%
+204.6%
-164.9%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$42.3M
+37.6%
+17352.4%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+6.0%
+35.9%
-11289.9%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
426.6%
+25.1%
-93.4%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
0.30x
-19.7%
+8524.3%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: I'd like to remind everyone that today's call and webcast are being recorded. Please note that they are the property of Apollo Commercial Real Estate Finance, Inc. and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release. I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking statements. Today's conference call and webcast may include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these statements and projections. In addition, we will be discussing certain non-GAAP measures on this call, which management believes are relevant to assessing the company's financial performance. These measures are reconciled to the GAAP figures in our earnings presentation, which is available in the Stockholders section of our website. We do not undertake any obligation to update our forward-looking statements or projections unless required by law. To obtain copies of our latest SEC filings, please visit our website at www.apollocref.com or call us at (212) 515-3200. At this time, I'd like to turn the call over to the company's Chief Executive Officer, Stuart Rothstein.
Stuart Rothstein: Thank you, operator. Good morning, and thank you for joining us on the Apollo Commercial Real Estate Finance, Inc. First Quarter 2026 Earnings Call. I am joined today by Anastasia Mironova, our Chief Financial Officer; and Scott Weiner, Chief Investment Officer. This call comes at a pivotal moment for ARI. As previously announced, we completed the sale of the company's $9 billion loan portfolio to Athene on April 24. Following repayment of ARI's financing facilities, other indebtedness and transaction expenses, ARI's total assets now consist of approximately $1.3 billion of cash, along with 4 REO assets representing approximately $900 million in gross value. The sale delivered ARI stockholders a compelling premium to where the stock has traded in recent years, and we believe this outcome demonstrates our unwavering commitment to maximizing stockholder value. As previously indicated, ARI's management team, Board of Directors and other senior investment professionals at Apollo are in process of evaluating a range of commercial real estate-related strategies for ARI with the goal to deliver attractive, go-forward returns for stockholders. We have spent a significant amount of time since the announcement at the end of January, exploring different strategies and speaking with bankers and other industry experts. We anticipate having an update on the strategy exploration in the coming months. Shifting now to a brief update on the 4 remaining REO assets. As a reminder, 2 assets, the Brook, a multifamily asset in Brooklyn and the Mayflower Hotel in Washington, D.C. …
