10-Q · May 7, 2026
ACRE's Q1 2026 financial results reveal a significant decline in net income, with losses attributable to the decrease in revenue from various loan activities. The company closed several substantial mortgage loans during…
Earnings analysis · 10-Q
ACRE earnings analysis
Filed August 3, 2026 · Our reading of the company's report
The latest report
ACRE delivered Q2 revenue of $14.356 million, up $1.791 million year over year, and returned to $4.383 million of net income after a $9.606 million implied Q1 loss. Improved net interest margin and lower…
Read full summary
ACRE delivered Q2 revenue of $14.356 million, up $1.791 million year over year, and returned to $4.383 million of net income after a $9.606 million implied Q1 loss. Improved net interest margin and lower real-estate-owned expenses supported results, but the comparison with Q2 2025 was heavily affected by the prior-year $20.150 million CECL reversal versus a $0.865 million current-quarter provision. Loan growth and expanded funding capacity support origination activity, while higher debt, a November 2026 $90.0 million term-loan maturity, and CRE credit risk temper the outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
What stood out
-
Revenue growth and return to quarterly profit
Q2 total revenue increased 14.3% year over year to $14.356 million from $12.565 million and rose 6.7% sequentially from an implied Q1 2026 $13.460 million. Net income attributable to common stockholders was $4.383 million, versus a $11.035 million loss a year earlier and an implied $9.606 million Q1 loss.
-
Net interest margin expanded
Net interest margin grew 22.2% year over year to $8.572 million from $7.016 million, driven by weighted-average earning assets of $1.9 billion versus $1.4 billion. Interest income increased to $27.754 million from $23.117 million, exceeding the increase in interest expense to $19.182 million from $16.101 million.
-
Portfolio expanded with rate-floor protection
The held-for-investment loan portfolio reached $1.749 billion carrying value and $1.840 billion outstanding principal across 38 loans at June 30, 2026. The company funded $339.6 million of principal during the first half, while 89.2% of loans had SOFR floors with a 1.71% weighted-average floor.
-
Funding capacity increased
Liquidity was approximately $105 million as of July 30, 2026, comprising $16 million cash and $89 million of secured-funding availability. The company also increased total funding commitments to $1.540 billion from $1.240 billion at December 31, 2025.
-
Positive operating cash flow and repurchase capacity
Operating cash flow remained positive at $6.938 million for the first six months of 2026, although below $12.890 million in the prior-year period. The board extended the unused $50.0 million repurchase authorization through July 31, 2027, while no shares were repurchased in Q2.
What to watch
-
CECL shifted from reversal to provision
Credit costs reversed unfavorably: Q2 recorded a $0.865 million CECL provision versus a $20.150 million CECL reversal in Q2 2025. For the first half, the company recorded a $12.003 million provision versus a $25.490 million reversal, citing loan/collateral attributes, new originations and weaker near-term macro forecasts.
-
Leverage rose and term-loan maturity nears
Debt outstanding increased to $1.263 billion at June 30, 2026 from $0.948 billion at December 31, 2025, while first-half investing cash outflow was $211.278 million. The $90.0 million secured term loan matures November 12, 2026, creating a near-term refinancing requirement.
-
CRE borrower and margin-call exposure
Management states that certain borrowers were unable to make interest and principal payments on time during 2025 and 2026. Its secured funding arrangements include margin-call provisions, and a default could require additional collateral or accelerate obligations; only $105 million of liquidity was reported as of July 30, 2026.
-
Lower rates could compress earnings
Interest-rate sensitivity remains adverse if SOFR falls: management estimates a 50-basis-point decline would reduce annual net income by $1.4 million, while a 100-basis-point decline would also reduce it by $1.4 million due to asset and liability floors. The company had no hedging or derivative instruments at June 30, 2026.
-
No formal risk-factor updates; office risk persists
The filing reports no new or amended Item 1A risk factors relative to the 2025 Annual Report. However, management continues to flag office-market stress, including elevated vacancy and default rates, and owns two foreclosed properties that produced $5.8 million of Q2 revenue combined.
Management's outlook
No quantitative revenue or EPS outlook was provided in the 10-Q. Management expects primary cash sources to be sufficient for operating, investing and financing commitments for at least the next 12 months; it also declared a $0.15 per-share Q3 2026 dividend, payable October 15, 2026.
Earlier filings 4
10-K · February 10, 2026
ACRE is a specialty CRE finance REIT externally managed by Ares Management, focused on directly originating senior and subordinated CRE loans and related investments. Management emphasizes direct origination (four U.S.…
10-Q · August 6, 2024
ACRE reported Q2 2024 total revenue of $16,797,000 and a net loss attributable to common stockholders of $6,125,000 (diluted EPS $(0.11)). Revenue and net interest margin declined materially versus the prior-year…
10-Q · May 2, 2023
Q1 2023 revenue increased to $26.50M (from $24.02M) driven by higher interest income, but a large provision for credit losses and realized loan losses produced a GAAP net loss of $6.44M (EPS $(0.12)). Liquidity remained…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.