Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) reported a net income of $126.7 million for the fiscal year ending December 31, 2025, translating to earnings of $0.81 per diluted share. This marks a significant recovery from a net loss of $119.6 million, or $0.97 per diluted share, in the previous year. The company's total revenue for 2025 was $271.6 million, down from $303.7 million in 2024, primarily due to a decrease in interest income from commercial mortgage loans, which fell to $625.5 million from $699.4 million. The decline in revenue was partially offset by a reduction in interest expenses, which decreased to $460.1 million from $503.9 million.
In terms of operational changes, Apollo Commercial Real Estate Finance announced a significant transaction on January 27, 2026, entering into an Asset Purchase and Sale Agreement with Athene Holding Ltd. The agreement involves the sale of the company's entire commercial real estate loan portfolio, excluding two loans expected to be repaid prior to closing. This strategic move is expected to reshape the company's operations and investment strategy moving forward. The company also reported a General CECL Allowance of $38.8 million as of December 31, 2025, reflecting an increase from $30.8 million in the previous year, indicating a cautious approach to potential credit losses.
The company’s loan portfolio as of December 31, 2025, was valued at approximately $8.8 billion, with commercial mortgage loans making up the majority. The portfolio's weighted-average risk rating was 3.0, indicating a moderate risk profile. The company also reported a debt-to-equity ratio of 4.1, reflecting its leverage strategy to enhance returns. As of the end of 2025, Apollo had $1.0 billion in unfunded loan commitments, which are expected to be funded over the remaining average tenor of 4.1 years for these loans.
Looking ahead, Apollo Commercial Real Estate Finance expressed optimism about its future operations, particularly following the anticipated closing of the Asset Sale. The company plans to evaluate a range of commercial real estate-related strategies designed to reposition itself in the market. The management team will leverage Apollo's broader investment platform and origination capabilities to explore new asset strategies and potential mergers and acquisitions. However, the company also acknowledged the ongoing challenges posed by macroeconomic conditions, including inflation and interest rate fluctuations, which could impact its financial performance and operational strategies.
About Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. is a REIT specializing in originating, acquiring, and managing performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. It targets institutional-quality real estate assets primarily in the U.S. and Europe. Externally managed by Apollo Global Management, the company leverages Apollo’s expertise and platform to deliver attractive risk-adjusted returns through dividends and capital appreciation, using a leveraged financing model.
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