Cash flow conversion is severely hampered by non-cash credit provisions, as demonstrated by the 2026Q1 period where the company reported a negative $8.7 million FFO against a $56.6 million operating cash outflow.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Cash from Operations | -43.26M | 21.35M | 35.55M | 46.79M | 57.16M | 48.35M | 31.76M | 32.45M | 39.22M | 31.27M | 8.54M | 275.52M | -222.91M | 25.44M | 1.95M |
| Operating CF Growth % | -939.48% | -39.93% | -24.02% | -18.14% | 18.22% | 52.23% | -2.13% | -17.25% | 25.41% | 266.27% | -96.9% | 223.6% | -976.1% | 1203.48% | - |
| Operating CF / Revenue % | -54.29% | 25.02% | 40.49% | 4249.68% | 52.42% | 47.37% | 40.36% | 42% | 70.94% | 67.47% | 18.93% | 326.77% | -349.51% | 75.33% | 29.47% |
| Net Income | -19.85M | -902K | -34.99M | -38.87M | 29.79M | 60.46M | 21.84M | 36.99M | 38.6M | 30.43M | 34.67M | 43.32M | 24.62M | 13.77M | 860K |
| Depreciation & Amortization | 4.28M | 4.63M | 5.41M | 0 | 0 | 9.89M | 892K | 667K | 5.72M | 7.61M | 167K | 219K | 160K | 38K | 698K |
| Stock-Based Compensation | 1.96M | 3.9M | 4.74M | 3.99M | 2.88M | 1.94M | 1.34M | 1.88M | 1.1M | 581K | 312K | 835K | 939K | 524K | 338K |
| Other Non-Cash Items | 35.06M | 18.25M | 66.15M | 101.18M | 39.58M | 2.3M | -104K | 223K | -1.23M | 1.03M | -71.94M | 166.31M | -192.57M | 10.5M | 298K |
| Working Capital Changes | -68.58M | -4.53M | -5.76M | -19.51M | -15.09M | -16.35M | -15.51M | -6.64M | 749K | -1.54M | 43.28M | 62.74M | -56.16M | 558K | 359K |
| Cash from Investing | -240.37M | 148.14M | 427.91M | 127.46M | 193.17M | -699.68M | -81.87M | -174.43M | 157.92M | -405.77M | -43.32M | 258.34M | -433.08M | -745.7M | -348.15M |
| Acquisitions (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 89.98M | 0 | 0 | -58.26M | 0 |
| Purchase of Investments | -835K | 0 | 0 | 0 | -27.87M | -150K | -274K | -1.69M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Sale of Investments | -19.94M | 0 | 0 | 0 | 2.08M | 0 | 0 | 0 | 0 | 12K | 11K | 5.68M | 0 | 0 | 0 |
| Other Investing | -219.61M | 148.14M | 427.91M | 127.46M | 218.96M | -699.39M | -81.32M | -171.05M | 157.92M | -405.77M | -133.3M | 258.34M | -429.99M | -687.4M | -348.15M |
| Cash from Financing | 288.88M | -168.63M | -507.63M | -205.07M | -159.67M | 627.17M | 119.25M | 136.14M | -214.4M | 355.57M | 73.06M | -541.41M | 652.45M | 716.96M | 368.35M |
| Dividends Paid | -33.53M | -39.01M | -59.64M | -75.95M | -71.81M | -58.42M | -42.77M | -37.49M | -32.09M | -30.53M | -29.4M | -28.6M | -28.58M | -18.57M | -1.66M |
| Common Dividends | -25.09M | -39.01M | -59.64M | -72.65M | -71.81M | -58.42M | -42.77M | -37.49M | -32.09M | -30.53M | -29.4M | -28.6M | -28.58M | -18.57M | -1.56M |
| Debt Issuance (Net) | 0 | -1000K | -1000K | -1000K | -1000K | 1000K | 1000K | 1000K | -1000K | 1000K | 1000K | -1000K | 1000K | 1000K | 1000K |
| Share Repurchases | 0 | 0 | 0 | -4.6M | 0 | 0 | 0 | 0 | 0 | 0 | -1.44M | 0 | 0 | 0 | -6.29M |
| Other Financing | -223K | 0 | -3.74M | -4.05M | -4.63M | -13.39M | -5.37M | -5.82M | -2.32M | -19.07M | -46.47M | -39.95M | 66.76M | -15.87M | -8.52M |
| Net Change in Cash | 5.25M | 863K | -44.16M | -30.82M | 90.66M | -24.16M | 69.14M | -5.83M | -17.25M | -18.93M | 38.27M | -7.56M | -3.55M | -3.29M | 22.15M |
| Exchange Rate Effect | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash at Beginning | 67.16M | 66.29M | 110.46M | 141.28M | 50.62M | 74.78M | 5.63M | 11.47M | 28.72M | 47.27M | 8.99M | 16.55M | 20.1M | 23.39M | 1.24M |
| Cash at End | 134.33M | 67.16M | 66.29M | 110.46M | 141.28M | 50.62M | 74.78M | 5.63M | 11.47M | 28.34M | 47.27M | 8.99M | 16.55M | 20.1M | 23.39M |
| Free Cash Flow | -43.94M | 19.72M | 35.55M | 46.79M | 57.16M | 48.21M | 31.49M | 30.77M | 39.22M | 31.27M | 8.18M | 274.92M | -226M | 25.4M | 1.95M |
| FCF Growth % | -236.61% | -44.52% | -24.02% | -18.14% | 18.57% | 53.09% | 2.35% | -21.55% | 25.41% | 282.11% | -97.02% | 221.64% | -989.67% | 1201.38% | - |
| FCF / Revenue % | -55.14% | 23.11% | 40.49% | 4249.68% | 52.42% | 47.23% | 40.02% | 39.82% | 70.94% | 67.47% | 18.14% | 326.06% | -354.35% | 75.21% | 29.47% |
CRE credit loss exposure
As reported in financial statements, ACRE's FFO frequently decouples from GAAP operating cash flow, with the 2026Q1 period showing a negative $8.7M FFO against a $56.6M operating cash outflow, highlighting the significant impact of non-cash credit provisions on the company's reported earnings metrics.
The wide variance between GAAP operating cash flow and FFO suggests that standard earnings metrics may not fully capture the liquidity strain caused by non-accrual loans. Investors should monitor this divergence, as it indicates that the company's ability to generate cash is increasingly disconnected from its accounting-based performance measures.
Based on reported figures, ACRE's dividend payout coverage has become increasingly strained, with the 2025Q3 dividend-to-AFFO ratio of 1.26x indicating that the company is currently paying out more in distributions than it generates in recurring cash flow available for shareholders.
The inability to consistently cover dividends with AFFO suggests that the current distribution policy may be unsustainable without further capital preservation or portfolio restructuring. This payout ratio warrants investigation, as it implies that the company is effectively returning capital rather than distributing true economic earnings.
According to historical data, ACRE's GAAP net income is frequently distorted by significant non-cash charges, as evidenced by the $39.4M loss in 2023Q4, which contrasts sharply with the company's operational cash flow and underscores the volatility inherent in its current credit-sensitive portfolio.
The recurring gap between net income and cash-based metrics suggests that management's CECL reserve adjustments are exerting a heavy downward pressure on reported profitability. This distortion makes it difficult to assess the underlying health of the loan book without adjusting for these subjective, non-cash accounting entries.
Financial filings indicate that ACRE's cash flow statement may mask underlying liquidity issues, as the reliance on accrued interest income often precedes the actual collection of cash, potentially overstating the company's true ability to service its own debt obligations during periods of market stress.
The presence of PIK interest and accrued income suggests that the cash flow statement may be providing a more optimistic view of liquidity than the actual balance sheet reality. Analysts should be cautious, as these accruals may eventually lead to significant write-downs if the underlying borrowers fail to achieve their business plans.
Quick answers to the most common questions about buying ACRE stock.
Ares Commercial Real Estate Corporation (ACRE) generated $21.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Ares Commercial Real Estate Corporation (ACRE) generated $19.7M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Ares Commercial Real Estate Corporation (ACRE) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Ares Commercial Real Estate Corporation (ACRE) returned $39.0M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.