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TWO

Two Harbors Investment Corp.

TWO

Two Harbors Investment Corp. • NYSE
$10.14 ▼ -0.69% (-0.07)
Market Cap $1.06 B
52w High $14.28
52w Low $9.30
Dividend Yield 1.63%
P/E -4.3
Volume 482.40K
Outstanding Shares 104.16M

Income Statement

Period Revenue Operating Expense Net Income Net Profit Margin Earnings Per Share EBITDA
Q3-2025 $247.571M ▲ $21.307M ▼ $-127.921M ▲ -51.67% ▲ $-1.36 ▲ $-9.597M ▼
Q2-2025 $119.383M ▼ $21.469M ▼ $-259.041M ▼ -216.983% ▼ $-2.62 ▼ $79.256M ▲
Q1-2025 $268.241M ▼ $47.094M ▲ $-79.055M ▼ -29.472% ▼ $-0.89 ▼ $53.09M ▼
Q4-2024 $491.729M ▲ $40.885M ▲ $264.945M ▲ 53.88% ▲ $2.54 ▲ $307.601M ▲
Q3-2024 $126.483M $20.18M $-238.485M -188.551% $-2.42 $-94.012M

Balance Statement

Period Cash & Short-term Total Assets Total Liabilities Total Equity
Q3-2025 $7.119B ▲ $10.866B ▼ $9.095B ▼ $1.772B ▼
Q2-2025 $975.054M ▲ $12.959B ▼ $11.073B ▼ $1.886B ▼
Q1-2025 $829.25M ▼ $13.683B ▲ $11.537B ▲ $2.147B ▲
Q4-2024 $7.876B ▲ $12.204B ▼ $10.082B ▼ $2.123B ▼
Q3-2024 $611.706M $12.888B $10.718B $2.169B

Cash Flow Statement

Period Net Income Cash From Operations Cash From Investing Cash From Financing Net Change Free Cash Flow
Q3-2025 $338.096M ▲ $-239.238M ▼ $2.127B ▲ $-1.8B ▼ $88.624M ▼ $-118.106M ▼
Q2-2025 $79.055M ▲ $99.112M ▼ $829.22M ▲ $-827.76M ▼ $100.572M ▲ $-111.913M ▼
Q1-2025 $-79.055M ▼ $111.913M ▲ $-2.028B ▼ $1.796B ▲ $-119.916M ▼ $111.913M ▲
Q4-2024 $276.729M ▲ $-21.059M ▼ $1.224B ▲ $-996.972M ▼ $205.935M ▲ $-48.564M ▼
Q3-2024 $-238.485M $87.081M $-254.936M $-7.261M $-175.116M $43.887M

Five-Year Company Overview

Income Statement

Income Statement The company’s income statement shows how sensitive it is to interest rates and market swings. Earnings have moved from deep losses a few years ago to solid profits more recently, with especially strong improvement in the latest year. That said, the pattern over the last five years is very uneven, with profits one year, losses the next, then a rebound. This kind of volatility is typical for mortgage REITs but means results can shift quickly as funding costs and mortgage values move. Margins have generally been positive except in the worst stress year, and recent operating performance looks much healthier than during the early pandemic period. Still, the history suggests investors should expect “lumpy” earnings, not a smooth upward trend.

Balance Sheet

Balance Sheet The balance sheet is highly leveraged, as is common in mortgage REITs. Total assets are sizable, but they are financed largely with debt rather than equity. Equity has edged lower over time, while debt has increased significantly compared with earlier years, indicating a heavier reliance on borrowed money to run the strategy. Cash on hand is modest relative to the size of the balance sheet, which is normal for this model but leaves less room for error if markets tighten. Overall, the company depends on its ability to roll and manage its funding, and its book value is exposed to movements in interest rates and mortgage spreads.

Cash Flow

Cash Flow Despite the earnings swings, operating cash flow has been consistently positive over the past several years, which is a key strength. The business does generate cash from its core activities, even when reported earnings are under pressure. Free cash flow has been more mixed. Some years show clear surplus after investments, while others reflect heavier spending on assets and the servicing platform. That pattern suggests a business that can fund itself in normal times, but that periodically needs to reinvest meaningfully to support its strategy and growth, especially around its shift toward mortgage servicing rights.

Competitive Edge

Competitive Edge Within the mortgage REIT space, Two Harbors is trying to stand out by specializing in mortgage servicing rights and by tightly integrating servicing with its investment portfolio. This specialization in a complex niche offers an edge because not all competitors have the same depth of expertise or operational setup. Pairing servicing rights with agency mortgage-backed securities is designed to balance the portfolio: servicing rights can benefit when rates rise, partly offsetting pressure on securities. Bringing servicing in-house through the RoundPoint acquisition gives more control over costs, service quality, and customer relationships. However, the overall industry still has relatively thin moats, and the company faces intense competition, regulatory oversight, and heavy dependence on short-term financing markets.

Innovation and R&D

Innovation and R&D For a real estate investment trust, the company is relatively active on the innovation front. Its move to become more focused on mortgage servicing rights, combined with owning the servicing platform, is a strategic shift rather than a traditional passive investment approach. On the technology side, it uses a leading digital mortgage platform through a partnership with ICE and is building a direct-to-consumer channel to recapture borrowers who refinance, which could enhance retention and margins. The company also talks about using data and artificial intelligence to improve servicing efficiency and risk management, and is exploring new product lines such as second-lien home equity loans. All of this aims to squeeze more value from each customer relationship and make the business more resilient through rate cycles.

Summary

Overall, Two Harbors looks like a mortgage REIT that has been reshaping itself from a more traditional model into a servicing- and technology-enabled platform centered on mortgage servicing rights. Financial results have improved materially in the most recent year but remain inherently volatile, reflecting the nature of leveraged, rate-sensitive assets. The balance sheet carries substantial leverage, with a relatively thin equity base supporting a large pool of assets, which amplifies both upside and downside in stressed markets. Cash generation from operations is a positive, but free cash flow can be uneven because of periodic investments in servicing capabilities and asset purchases. Strategically, its niche in servicing rights, in-house platform, and growing use of technology and direct-to-consumer channels provide some differentiation in a crowded field. The main opportunities lie in scaling these capabilities and managing interest-rate and prepayment risks effectively. The main risks center on leverage, funding conditions, rate volatility, and the execution of its integrated servicing and technology strategy.

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