Orchid Island Capital, Inc., a specialty finance company, invests in residential mortgage-backed securities (RMBS) in the United States. The company’s RMBS is ...
Orchid Island Capital, Inc. is a mortgage-focused real estate investment trust, or mREIT, rather than a conventional property-owning REIT. The company was incorporated in Maryland in 2010, commenced operations later that year, and completed its initial public offering in February 2013. It is headquartered in Vero Beach, Florida, and its ...Orchid Island Capital, Inc. is a mortgage-focused real estate investment trust, or mREIT, rather than a conventional property-owning REIT. The company was incorporated in Maryland in 2010, commenced operations later that year, and completed its initial public offering in February 2013. It is headquartered in Vero Beach, Florida, and its common stock trades on the New York Stock Exchange under the ticker ORC. Robert E. Cauley serves as chairman and chief executive officer; he is associated with the company’s founding and has extensive experience in the agency mortgage-backed securities market.
The company’s core business is investing in residential mortgage-backed securities backed by single-family residential mortgages. Its portfolio can include traditional pass-through Agency RMBS, mortgage pass-through certificates, collateralized mortgage obligations, and structured Agency RMBS such as interest-only, inverse interest-only, and principal-only securities. Agency securities are generally issued or guaranteed by U.S. government-sponsored enterprises or federal agencies, which can reduce credit risk relative to non-Agency mortgage assets, although they remain exposed to interest-rate, prepayment, liquidity, market-value, and financing risks.
Orchid’s business model is based primarily on leverage. It finances mortgage assets through repurchase agreements and other secured funding arrangements, then seeks to earn income from the difference between the portfolio yield and its borrowing and hedging costs. Consequently, profitability can be highly sensitive to changes in short-term interest rates, the shape of the yield curve, mortgage prepayment speeds, collateral values, and the effectiveness of interest-rate hedges. Unlike an industrial manufacturer, Orchid does not have a conventional bill of materials, physical production process, inventory, or significant capital-expenditure program. Its principal economic inputs are mortgage securities, financing capacity, risk-management instruments, liquidity, and specialized investment-management expertise.
The company has elected to be taxed as a real estate investment trust for U.S. federal income-tax purposes. Subject to meeting applicable REIT requirements, it generally can avoid corporate-level tax on the portion of taxable income distributed to shareholders, with REIT rules generally requiring distributions of at least 90% of taxable income. This structure supports a dividend-oriented investment profile, but distributions can vary and are not guaranteed.
The supplied trailing-period data shows approximately $1.14 billion in market capitalization, a reported dividend of $1.36 per share, a price-to-book ratio of about 0.92, debt-to-equity of approximately 8.0, and a dividend yield near 20.7%. These figures should be interpreted carefully because mREIT accounting and earnings are materially affected by fair-value changes, leverage, hedging, and non-cash items. The reported full-time employee count is zero, indicating that the company relies substantially on external management and service providers rather than maintaining a large direct workforce. Key priorities for the business include preserving liquidity, managing leverage and interest-rate exposure, protecting book value, maintaining access to financing, and generating sustainable shareholder distributions.
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).
$179.5M
+229.9%
+4.0%
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.
$159.0M
+322.3%
+547.0%
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.
+97.8%
-2.2%
-62.4%
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).
+88.6%
—
-30.0%
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.
+88.6%
+28.0%
+529.8%
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.
$120.4M
+79.8%
+67.9%
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.
+67.1%
-45.5%
+61.4%
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.
746.7%
—
-0.3%
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.
0.09x
—
-13.3%
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: Good day, and thank you for standing by. Welcome to the Orchid Island Capital Second Quarter 26 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a Q&A session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear automated message that your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Melissa Alfonso, investor relations. Please go ahead.
Melissa Alfonso: Good morning, and welcome to the Second Quarter 26 Earnings Conference Call Orchid Island Capital. This call is being recorded today, 07/24/2026. At this time, the company would like to remind the listeners that statements made during today's conference call relating to matters that are not historical facts are forward looking statements subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 2 thousand. Listeners are cautioned that such forward looking statements are based on information currently available on the management's good faith, belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward looking statements. Important factors that could cause such differences are described in the company's filings with the Securities and Exchange Commission, including the company's most recent annual report on Form 10 The company assumes no obligation to update such forward looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward looking statements. Now I would like to turn the conference over to the company's Chairman and Chief Executive Officer, Mr. Robert E. Cauley.
Operator: Please go ahead, sir.
Robert E. Cauley: Thank you, Melissa. Melissa, and good morning. I hope everybody's had a chance to download our deck as usual. We will be focused on the deck for the call. Just to begin on slide 3, we just have our table of contents. So the first thing first order of business will be our controller, Jerry Sintes, to go over our financial results. Then I will go over the market developments that occurred during the quarter. These are what shaped our decision making and our results. And then we will go through the portfolio characteristics, hedge positions, and then also our positioning going forward in our outlook on the market. So with that, I will turn it over to Jerry.
Jerry Sintes: Thank you, Bob. If we turn to Page 5, we will start with the financial highlights for the quarter. During Q2, we earned $0.44 per share That compares to a loss of $0.11 during Q1. Book value at the end of the quarter was $7.22 compared to $7.08 at the start of the quarter. Total return during the quarter was 6.2%, compared to …
