Wed, Apr 23, 9:25 PM (25 days ago)
**KKR Real Estate Finance Trust Inc. (KREF) Q1 2025 Financial Performance Summary** **Ticker:** KREF **Quarterly Financial Health:** - **Revenue:** $113.97 million (interest income) vs. $151.62 million (Q1 2024) - **Net Income:** -$5.75 million vs. -$3.43 million (Q1 2024) - **Earnings per Share (EPS):** -$0.15 vs. -$0.13 (Q1 2024) - **Cash Flow from Operations:** $15.92 million vs. $34.49 million (Q1 2024) **Profit Margins:** - **Net Margin:** -4.99% vs. -2.26% (Q1 2024) **Cash Flow:** - **Operating Cash Flow:** $15.92 million vs. $34.49 million (Q1 2024) - **Investing Cash Flow:** -$220.47 million vs. $236.76 million (Q1 2024) - **Financing Cash Flow:** $205.35 million vs. -$300.77 million (Q1 2024) **Earnings Changes:** - **Year-over-Year Change in Net Income:** -67.47% - **Quarter-over-Quarter Change in Net Income:** -269.64% **Quarterly Performance Discussion:** - **Revenue Decline:** Primarily due to a decrease in interest income, driven by lower index rates and fewer calendar days. - **Increased Expenses:** Total operating expenses rose by $20.8 million, mainly due to a $20.3 million change in the provision for credit losses. - **Credit Losses:** The provision for credit losses increased due to additional reserves for risk-rated 5 and 4 loans in the multifamily and life science sectors. **Trends:** - **Interest Income:** Decreased by $9.64 million due to lower index rates and fewer calendar days. - **Operating Expenses:** Increased by $20.8 million, primarily due to higher provision for credit losses. **Uncertainties:** - **Economic Conditions:** Significant volatility in global markets due to inflation, elevated interest rates, and geopolitical conditions. - **Credit Risk:** Potential for increased defaults and non-performance on floating-rate assets. **Future Operations Impact:** - **Financing Strategy:** Plans to expand and diversify financing sources, focusing on non-mark-to-market financing to reduce exposure to market volatility. - **Liquidity:** Maintaining sufficient liquidity to meet margin calls and operational needs. **Summary:** KKR Real Estate Finance Trust Inc. faced challenges in Q1 2025, with a decline in revenue and increased operating expenses, primarily due to higher provision for credit losses. The company is focusing on diversifying its financing sources and maintaining liquidity to navigate the current economic uncertainties.