Annaly Capital Management (NYSE:NLY) Reports Strong Q4 2025 Earnings, Tops Estimates
Annaly Capital Management Inc (NYSE:NLY) has released financial results for the fourth quarter and full year ended December 31, 2025, delivering a performance that exceeded analyst expectations on key profitability metrics. The mortgage real estate investment trust (REIT) reported robust earnings against a backdrop of significant portfolio growth and a favorable interest rate environment, which appears to have been met with a cautiously positive response from the market.
Earnings and Revenue Performance Versus Estimates
The company's headline earnings figure came in above Wall Street forecasts. Annaly reported Earnings Available for Distribution (EAD), a key non-GAAP metric for mortgage REITs, of $0.74 per average common share for the quarter. This narrowly surpassed the analyst consensus estimate of $0.7388 per share.
However, a more complex picture emerges on the revenue front. The company reported total revenue of $921.8 million for the quarter, which represents a substantial 74.8% increase compared to the same period last year and significantly exceeded the provided revenue estimate of approximately $1.49 billion for Q1 2026. It is important to note that direct quarterly revenue estimates for Q4 2025 were not provided in the context, making a precise quarterly comparison difficult. The reported figure of $921.8 million appears strong on a year-over-year basis, but the provided data suggests analysts are modeling even higher sales for the upcoming first quarter of 2026.
Key reported figures for the quarter include:
- GAAP Net Income: $1.40 per average common share.
- Earnings Available for Distribution (EAD): $0.74 per average common share.
- Economic Return: 8.6% for the quarter and 20.2% for the full year 2025.
- Book Value: Increased to $20.21 per common share, up from $19.25 at the end of the previous quarter.
- Quarterly Dividend: A common stock cash dividend of $0.70 per share was declared.
Market Reaction and Price Action
Following the earnings release, the market's initial reaction has been modestly positive. In after-market trading, the stock posted a gain of approximately 0.41%. This follows a generally upward trend in the recent period, with the stock rising about 1.72% over the past week and 5.39% over the last month. The reaction suggests investors viewed the earnings beat, stable dividend, and book value growth favorably, though the muted after-hours move may also indicate that some of this strength was already anticipated or that investors are weighing the results against future expectations.
Strategic Highlights and Business Growth
Annaly's earnings were supported by aggressive growth and strategic capital deployment across its three core business segments throughout 2025. The press release highlighted a "solid year" driven by the company's diversified housing finance model.
The most significant developments from the quarter and full year include:
- Portfolio Expansion: The total portfolio reached $104.7 billion. The core Agency mortgage-backed securities portfolio grew by 32% or $22 billion over the full year, ending at $92.9 billion.
- Credit Business Momentum: The Residential Credit portfolio increased 16% in the quarter to $8.0 billion, driven by record activity in its correspondent lending channel. The group closed a record $4.6 billion in securitizations during Q4 alone.
- MSR Growth: The Mortgage Servicing Rights (MSR) portfolio grew 8% in the quarter to a market value of $3.8 billion, with Annaly positioning itself as the second-largest purchaser of conventional MSR in 2025.
- Improved Profitability Metrics: The net interest spread (excluding premium amortization adjustment) remained healthy at 1.49%, while the average economic cost of interest-bearing liabilities declined slightly to 3.95%.
- Capital and Liquidity: The company raised $2.9 billion of accretive capital during the year and maintained a strong liquidity position with $9.4 billion in total assets available for financing.
CEO David Finkelstein struck an optimistic tone, stating, "We enter 2026 well-positioned to continue this momentum given the constructive environment and believe our platform will continue to provide enhanced risk-adjusted returns." While the press release did not provide specific quantitative financial guidance, this forward-looking statement underscores management's confidence.
Looking Ahead
Analyst estimates for Annaly's future performance project continued strength. For the full year 2026, sales are estimated at approximately $6.13 billion. For the upcoming first quarter of 2026, analysts are forecasting sales of about $1.50 billion and revenue of $745.7 million. The company's ability to meet or exceed these expectations will likely depend on the continued stability of the interest rate environment and its successful execution in deploying capital across its growing investment platforms.
For a detailed breakdown of future earnings estimates and historical performance, readers can review the comprehensive data available on Annaly's earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
