Starwood Property Trust (STWD) Financials

Starwood Property Trust (NYSE: STWD) has shown notable fluctuations across its key financial metrics over the last four years, with an emphasis on the quarterly performance through Q1 2025. An analysis of their income statements, cash flow statements, and balance sheets reveals several trends and key highlights to consider for potential investors.

• Q1 2025 net income attributable to common shareholders was $112.3 million, a strong increase from $51.6 million in Q3 2024 and $77.8 million in Q2 2024, highlighting recent improved profitability.
• Total revenue for Q1 2025 was $476.7 million, representing stability when compared with quarterly revenues ranging from $473 million to $1.02 billion over prior periods, indicating consistent core operations.
• Net cash from continuing operating activities increased to approximately $239 million in Q1 2025, indicating solid cash generation capacity in the most recent quarter.
• Total assets remain robust at $62.2 billion as of Q1 2025, providing a strong asset base to support operations and growth.
• Starwood continues steady dividend payments, with a consistent dividend of $0.48 per common share each quarter over the past years, providing income stability for investors.

• Net interest income was positive $12.2 million in Q1 2025, whereas in many prior quarters this line was negative or fluctuated significantly, reflecting variability in interest income/expense management.
• The balance sheet shows substantial liabilities, with approximately $55 billion in total liabilities versus $6.7 billion in total equity as of Q1 2025, typical for a financial services company but notable for leverage monitoring.
• Cash and due from banks slightly increased in Q1 2025 to $440.6 million from $357.9 million in Q3 2024, reflecting moderate liquidity coverage.
• Non-interest expenses increased to roughly $384 million in Q1 2025 from $503 million in Q3 2024 but remained controlled relative to revenues, indicating ongoing operational cost management.
• The weighted average shares outstanding have modestly increased from approximately 312 million in early 2023 to 339 million in Q1 2025, which may dilute EPS growth but support capital for funding activities.

• Q1 2025 saw a major cash outflow in investing activities of about $906 million, driven by large purchases of investment securities ($1.74 billion), exceeding sales, potentially pressuring free cash flow.
• While net income improved in Q1 2025, the previous quarters (notably Q4 2024) showed much lower net income and negative net interest income, highlighting potential volatility in earnings.
• The company’s total liabilities have been decreasing somewhat but remain very high relative to equity, which could present financial risk if interest rates rise or asset values decline.
• Cash interest paid remains substantial (e.g., $265 million in Q1 2025), indicating a heavy interest expense burden on debt, which could pressure net margins in volatile rate environments.
• Provision for loan losses exhibited notable fluctuations, including a negative $25 million in Q1 2025, suggesting some volatility or write-backs but also risk in asset quality.

In summary, Starwood Property Trust has demonstrated resilience with improved profitability and ongoing dividend consistency, supported by a strong asset base and solid operating cash flow. However, investors should be mindful of its significant leverage, fluctuating net interest income, and notable cash outflows due to investment activity. The stock may appeal to those interested in a real estate finance play with dividend income, yet awareness of capital management and credit risk factors is essential going forward.