Claros Mortgage Trust's Non-GAAP Earnings Per Share falls short, with a negative difference of $0.76.
Claros Mortgage Trust Reports Q2 Loan Resolutions and Improved Liquidity
Claros Mortgage Trust (NYSE: CMTG) has reported its Q2 2025 results, which saw the company miss expectations significantly with a Non-GAAP EPS of -$0.77, falling short by $0.76. The company also reported a GAAP net loss of $181.7 million or $1.30 per share for the quarter [1][2].
Despite the earnings miss, Claros made substantial progress in loan resolutions. The company resolved a total of $1.0 billion in loans by unpaid principal balance (UPB), comprising four full repayments and two discounted payoffs. This resolution activity exceeded the total loan resolutions for each of the previous three years [1][2][3].
The company resolved 15 loans in total, amounting to $1.9 billion UPB. Of these, nine were watchlist loans, accounting for $1.1 billion UPB. By the end of Q2, the number of watchlist loans had been reduced to 17 loans totaling $2.1 billion UPB, down from $2.85 billion at the end of Q1. Claros expects to resolve three remaining watchlist loans valued at $237.3 million through foreclosure in upcoming quarters [1][2][3].
These loan resolutions have helped Claros improve its liquidity position substantially. The company has more than doubled its liquidity since the end of 2024, according to CEO Richard Mack [2][3]. This liquidity improvement is tied to debt reduction and proactive asset management.
The loan resolutions, however, were not enough to offset the challenges in asset performance and realized losses on loan portfolios. Distributable loss (a non-GAAP measure) was $110.1 million, or $0.77 per share. Excluding realized losses, distributable earnings would have been $14.8 million or $0.10 per share, indicating that losses from loan performance heavily impacted results [1][2].
Analysts currently hold a "Hold" rating on CMTG stock with average price targets near $3.00-$3.25, slightly above the August 2025 share price of about $2.89-$3.33. This reflects cautious optimism but recognition of ongoing portfolio challenges [2][3].
In the additional loan resolutions, one discounted payoff was involved. Two discounted payoffs in total amounted to $88.6 million of UPB, both being watchlist loans in the reported loan resolutions. All the discounted payoffs in the additional loan resolutions are watchlist loans [1][2][3].
References: [1] Claros Mortgage Trust Q2 2025 Earnings Release. (2025, August 5). Retrieved from https://www.clarosmt.com/investors/news-releases/2025/8/5/claros-mortgage-trust-announces-q2-2025-non-gaap-eps-of-$0-77-misses-expectations-by-$0-76
[2] Claros Mortgage Trust Q2 2025 Earnings Call Transcript. (2025, August 5). Seeking Alpha. Retrieved from https://seekingalpha.com/article/4449871-claros-mortgage-trust-q2-2025-earnings-call-transcript
[3] Claros Mortgage Trust Q2 2025 Results - Key Points. (2025, August 5). Yahoo Finance. Retrieved from https://finance.yahoo.com/news/claros-mortgage-trust-q2-2025-173500343.html
Business improvements were observed in Claros Mortgage Trust (CMTG) as they made substantial progress in loan resolutions, exceeding the total loan resolutions for the previous three years. This significant loan resolution activity, which included two discounted payoffs amounting to $88.6 million, has contributed to the company's efforts to improve its liquidity position in the finance sector.
