ONITY GROUP INC.ONIT
ONITY GROUP INC. Segments Disclosure
Note 24 — Business Segment Reporting
Our business segments reflect the internal reporting that our Chief Executive Officer, whom we have determined to be our Chief Operating Decision Maker (CODM), uses to evaluate our operating and financial performance and to assess the allocation of our resources. The CODM reviews detailed segment results and key metrics, and uses pre-tax income calculated both on a GAAP basis and on a managed or adjusted basis, as internally defined, to assess the segment performance and allocate resources. The segment information presented below is prepared under GAAP, consistent with the amounts included in our consolidated financial statements. A brief description of our current reportable business segments is as follows:
Servicing. This segment is primarily comprised of our mortgage servicing and subservicing business and accounts for 85% of our total revenues in 2025. We earn servicing and subservicing fees, including ancillary income, and incur cost to service the loans which varies depending on delinquency status. We are exposed to MSR valuation adjustments and advancing obligations when we own the MSR. Our servicing portfolio includes both forward and reverse conventional, government-insured and non-Agency mortgage loans, including the reverse mortgage loans classified as loans held for sale pooled into HMBS, previously classified as loans held for investment on our balance sheet. The CODM uses pre-tax income to assess the segment performance and allocate resources, including employees, and financial and capital resources, predominantly in the annual budget and forecasting process. On a monthly basis, the CODM considers budget-to-actual variances, actual variances and trends. The CODM also uses segment pre-tax income for evaluating MSR investments and subservicing pricing and comparing the results and return on assets and the compensation of certain employees.
Originations. The Originations segment reflects the purchase and origination of conventional, government-insured and certain non-Agency residential forward and reverse mortgage loans through multiple channels. The loans are generally sold (securitized through the GSEs and Ginnie Mae programs) shortly after origination on a servicing retained basis. We originate forward mortgage loans directly with customers (consumer direct channel) as well as through correspondent lending arrangements. We originate reverse mortgage loans in all three channels through our correspondent lending arrangements, broker relationships (wholesale) and retail channels. In addition to our originated MSRs, we acquire MSRs through multiple channels, including flow purchase agreements, the Agency Cash Window programs and bulk MSR purchases. The CODM uses pre-tax income to assess the segment performance and allocate resources, including employees, and financial and capital resources, predominantly in the annual budget and forecasting process. On a monthly basis, the CODM considers budget-to-actual variances, actual variances and trends. The CODM also uses segment pre-tax income for evaluating loan and MSR originations and acquisitions, monitoring margin and pricing, and comparing the results and return on assets and the compensation of certain employees.
Corporate. Corporate includes expenses of corporate support services and other business activities that are currently individually insignificant, interest income on short-term investments of cash, gain or loss on extinguishment of debt, interest expense on unallocated corporate debt and foreign currency exchange gains or losses. Corporate also includes the management of our liquidity, funding and capital, and the respective allocation to the segments.
Revenues and expenses directly associated with each respective business segment are included in determining its results of operations. We allocate certain expenses incurred by corporate support services to each business segment using various methodologies intended to approximate the utilization of such services, primarily based on time studies, personnel volumes and service consumption levels. Support service costs not allocated to the Servicing and Originations segments are retained in the Corporate segment along with certain other costs including certain litigation and settlement related expenses or recoveries, and other costs related to operating as a public company. Interest expense on direct asset-backed financings is recorded in the respective Servicing and Originations segments. We allocate interest expense on corporate debt from Corporate to the business segments based on the relative financing needs of the licensed subsidiaries (PHH and PAS) that carry out these businesses. Accordingly, we did not allocate to the segments the interest expense of the $285.0 million 12% Onity Senior Secured Notes due 2027 through their redemption in November 2024, nor the interest expense on the portion of the $500.0 million 9.875% Senior Notes due 2029 that was not pushed down to the licensed subsidiaries through intercompany financing agreements.
Financial information for our segments prepared under GAAP is as follows: | |||||||||||||||||||||||
| Results of Operations | Servicing | Originations | Corporate | Business Segments Consolidated | |||||||||||||||||||
| Year Ended December 31, 2025 | |||||||||||||||||||||||
| Servicing and subservicing fees | $ | 857.2 | $ | — | $ | — | $ | 857.2 | |||||||||||||||
Gain on reverse loans and HMBS-related borrowings, net | 34.5 | 24.3 | — | 58.8 | |||||||||||||||||||
Gain (loss) on loans held for sale, net | (4.1) | 97.1 | — | 93.0 | |||||||||||||||||||
| Other revenue, net | 22.1 | 35.7 | — | 57.8 | |||||||||||||||||||
| Revenue | 909.6 | 157.1 | — | 1,066.7 | |||||||||||||||||||
MSR valuation adjustments, net | (189.4) | 19.5 | — | (169.8) | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Compensation and benefits | 93.6 | 59.7 | 99.3 | 252.6 | |||||||||||||||||||
| Servicing and origination | 47.6 | 11.4 | — | 58.9 | |||||||||||||||||||
| Technology and communications | 30.3 | 9.5 | 24.3 | 64.1 | |||||||||||||||||||
Professional services | 19.6 | 2.1 | 46.1 | 67.8 | |||||||||||||||||||
Occupancy, equipment and mailing | 28.8 | 3.2 | 1.6 | 33.6 | |||||||||||||||||||
| Corporate overhead allocations | 55.1 | 17.0 | (72.1) | — | |||||||||||||||||||
| Other expenses | 1.9 | 6.4 | 6.5 | 14.7 | |||||||||||||||||||
Operating expenses | 276.8 | 109.3 | 105.6 | 491.7 | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
| Interest income | 51.0 | 80.3 | 4.1 | 135.4 | |||||||||||||||||||
| Interest expense | (211.6) | (73.5) | (23.6) | (308.6) | |||||||||||||||||||
| Pledged MSR liability expense | (169.6) | — | 0.1 | (169.5) | |||||||||||||||||||
| Other, net | 0.7 | (1.7) | 1.3 | 0.3 | |||||||||||||||||||
Other income (expense), net | (329.5) | 5.2 | (18.1) | (342.4) | |||||||||||||||||||
| Income (loss) before income taxes | $ | 113.9 | $ | 72.4 | $ | (123.7) | $ | 62.7 | |||||||||||||||
| Results of Operations | Servicing | Originations | Corporate | Business Segments Consolidated | |||||||||||||||||||
| Year Ended December 31, 2024 | |||||||||||||||||||||||
| Servicing and subservicing fees | $ | 830.5 | $ | 2.0 | $ | — | $ | 832.5 | |||||||||||||||
Gain on reverse loans held for investment and HMBS-related borrowings, net | 16.5 | 25.9 | — | 42.5 | |||||||||||||||||||
Gain on loans held for sale, net | 1.4 | 57.7 | — | 59.0 | |||||||||||||||||||
| Other revenue, net | 18.2 | 23.7 | — | 42.0 | |||||||||||||||||||
| Revenue | 866.7 | 109.3 | — | 976.0 | |||||||||||||||||||
MSR valuation adjustments, net | (109.7) | 13.6 | — | (96.2) | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
| Compensation and benefits | 100.6 | 46.4 | 85.4 | 232.5 | |||||||||||||||||||
| Servicing and origination | 42.8 | 7.8 | 1.6 | 52.3 | |||||||||||||||||||
| Technology and communications | 24.7 | 7.3 | 21.0 | 52.9 | |||||||||||||||||||
Professional services | 28.0 | 2.2 | 22.5 | 52.6 | |||||||||||||||||||
Occupancy, equipment and mailing | 27.3 | 2.4 | 1.7 | 31.4 | |||||||||||||||||||
| Corporate overhead allocations | 45.8 | 16.8 | (62.6) | — | |||||||||||||||||||
| Other expenses | 3.7 | 5.4 | 5.6 | 14.7 | |||||||||||||||||||
Operating expenses | 273.0 | 88.3 | 75.2 | 436.5 | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | 32.9 | 54.4 | 6.0 | 93.3 | |||||||||||||||||||
| Interest expense | (184.4) | (58.1) | (46.3) | (288.9) | |||||||||||||||||||
| Pledged MSR liability expense | (175.6) | — | 0.1 | (175.4) | |||||||||||||||||||
Loss on extinguishment of debt | (0.1) | — | (49.3) | (49.4) | |||||||||||||||||||
| Equity in earnings of unconsolidated entity | 22.9 | — | — | 22.9 | |||||||||||||||||||
| Other, net | (6.8) | (0.4) | 0.7 | (6.6) | |||||||||||||||||||
| Other expense, net | (311.2) | (4.2) | (88.7) | (404.1) | |||||||||||||||||||
| Income (loss) before income taxes | $ | 172.8 | $ | 30.4 | $ | (163.9) | $ | 39.3 | |||||||||||||||
| Results of Operations | Servicing | Originations | Corporate | Business Segments Consolidated | |||||||||||||||||||
| Year Ended December 31, 2023 | |||||||||||||||||||||||
| Servicing and subservicing fees | $ | 945.2 | $ | 2.1 | $ | — | $ | 947.3 | |||||||||||||||
Gain on reverse loans held for investment and HMBS-related borrowings, net | 23.5 | 23.2 | — | 46.7 | |||||||||||||||||||
Gain on loans held for sale, net | 10.3 | 30.3 | — | 40.6 | |||||||||||||||||||
| Other revenue, net | 15.5 | 16.4 | — | 32.0 | |||||||||||||||||||
| Revenue | 994.6 | 72.1 | — | 1,066.7 | |||||||||||||||||||
MSR valuation adjustments, net | (243.9) | 11.7 | — | (232.2) | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Compensation and benefits | 107.2 | 43.0 | 79.0 | 229.2 | |||||||||||||||||||
| Servicing and origination | 53.5 | 2.7 | 1.1 | 57.3 | |||||||||||||||||||
| Technology and communications | 24.6 | 7.0 | 20.9 | 52.5 | |||||||||||||||||||
Professional services (1) | 35.1 | 1.9 | (14.7) | 22.3 | |||||||||||||||||||
Occupancy, equipment and mailing | 28.1 | 2.2 | 1.6 | 31.8 | |||||||||||||||||||
| Corporate overhead allocations | 45.5 | 18.7 | (64.2) | — | |||||||||||||||||||
| Other expenses | 7.8 | 5.3 | 5.9 | 19.0 | |||||||||||||||||||
Operating expenses | 301.7 | 80.8 | 29.6 | 412.1 | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | 21.7 | 51.8 | 4.5 | 78.0 | |||||||||||||||||||
| Interest expense | (173.3) | (56.6) | (43.7) | (273.6) | |||||||||||||||||||
| Pledged MSR liability expense | (296.4) | — | 0.1 | (296.3) | |||||||||||||||||||
Gain on extinguishment of debt | — | — | 1.3 | 1.3 | |||||||||||||||||||
| Equity in earnings of unconsolidated entity | 7.3 | — | — | 7.3 | |||||||||||||||||||
| Other, net | 1.7 | (0.2) | 1.3 | 2.8 | |||||||||||||||||||
Other expense, net | (439.0) | (5.0) | (36.4) | (480.5) | |||||||||||||||||||
| Income (loss) before income taxes | $ | 9.9 | $ | (2.0) | $ | (66.1) | $ | (58.1) | |||||||||||||||
(1)Professional services expense for 2023 includes the reversal of accruals following the resolution of litigation matters within Corporate.
| Total Assets | Servicing | Originations | Corporate | Business Segments Consolidated | ||||||||||||||||||||||
December 31, 2025 (1) | $ | 14,683.5 | $ | 1,252.3 | $ | 234.8 | $ | 16,170.6 | ||||||||||||||||||
| December 31, 2024 | 15,242.5 | 945.0 | 247.9 | 16,435.4 | ||||||||||||||||||||||
| December 31, 2023 | 11,687.6 | 551.9 | 274.3 | 12,513.7 | ||||||||||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 29, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.