NOI margins have compressed significantly to 55.7% in 2026Q1 from historical levels exceeding 100%, reflecting heightened pressure from servicing platform costs and financing expenses.
| 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 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 |
|---|
| Revenue | 765.12M | 605.61M | 845.84M | 640.49M | 12.61M | -142.91M | -862.56M | 1.9B | 708.13M | 838.62M | 498.75M | 732.02M | 591.62M | 500.38M | 538.88M | 264.91M | 53.4M | 3.2M | 4.44M | 1.47M |
| Revenue Growth % | -0.21% | -28.4% | 32.06% | 4980.79% | 108.82% | 83.43% | -145.43% | 168.11% | -15.56% | 68.14% | -31.87% | 23.73% | 18.24% | -7.14% | 103.42% | 396.05% | 1567.82% | -27.92% | 201.33% | - |
| Property Operating Expenses | 92.03M | 12.73M | -38.46M | 74.13M | 94.12M | 86.25M | 126M | 134.71M | 91.41M | 76.73M | 73.95M | 81.12M | 76.34M | 48.82M | 3.46M | 14.24M | 2.99M | 325.65K | 0 | 0 |
| Net Operating Income (NOI) | 673.09M | 592.88M | 884.29M | 566.36M | -81.51M | -229.16M | -988.57M | 1.76B | 616.72M | 761.89M | 424.8M | 650.9M | 515.28M | 451.56M | 535.41M | 250.67M | 50.41M | 2.88M | 4.44M | 1.47M |
| NOI Margin % | 87.97% | 97.9% | 104.55% | 88.43% | -646.62% | 160.35% | 114.61% | 92.9% | 87.09% | 90.85% | 85.17% | 88.92% | 87.1% | 90.24% | 99.36% | 94.62% | 94.4% | 89.83% | 100% | 100% |
| Operating Expenses | 234.88M | 177.07M | -66.78M | 6.52M | -664.36M | -509.75M | 390.3M | 724.83M | 4.11M | 113.16M | 89.75M | 174.65M | 421.48M | -209.55M | 279.26M | 119.24M | 15.34M | 11.94M | 1.06M | 141K |
| G&A Expenses | 66.56M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EBITDA | 69.94M | 45.52M | 952.56M | 559.83M | 582.85M | 280.59M | -1.38B | 1.02B | 517.2M | 649.7M | 336.33M | 477.62M | 95.41M | 662.79M | 257.88M | 149.03M | 39.49M | -9.02M | 3.15M | 1.33M |
| EBITDA Margin % | 9.14% | 7.52% | 112.62% | 87.41% | 4623.57% | -196.34% | 160.52% | 53.97% | 73.04% | 77.47% | 67.43% | 65.25% | 16.13% | 132.46% | 47.86% | 56.26% | 73.95% | -281.83% | 70.84% | 90.44% |
| Depreciation & Amortization | 5.18M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 969K | 1.28M | 1.36M | 1.62M | 1.67M | 1.73M | 0 | 0 | 0 | 0 | 0 |
| D&A / Revenue % | 0.68% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0.12% | 0.26% | 0.19% | 0.27% | 0.33% | 0.32% | 0% | 0% | 0% | 0% | 0% |
| Operating Income | 438.2M | 415.81M | 951.08M | 559.83M | 582.85M | 280.59M | -1.38B | 1.04B | 612.62M | 648.73M | 335.05M | 476.25M | 93.79M | 661.11M | 256.15M | 131.43M | 35.07M | -9.06M | 3.38M | 1.33M |
| Operating Margin % | 57.27% | 68.66% | 112.44% | 87.41% | 4623.57% | -196.34% | 159.86% | 54.73% | 86.51% | 77.36% | 67.18% | 65.06% | 15.85% | 132.12% | 47.53% | 49.61% | 65.67% | -283.03% | 76.15% | 90.44% |
| Interest Expense | 4M | 490.94M | 607.81M | 643.23M | 258.39M | 89.17M | 281.25M | 714.33M | 519.67M | 350.19M | 221.9M | 142.19M | 107.45M | 100.41M | 72.11M | 22.71M | 4.42M | 131K | 0 | 0 |
| Interest Coverage | - | 0.09x | 1.57x | 0.87x | 2.26x | 3.15x | -4.92x | 1.43x | 1.00x | 1.85x | 2.45x | 4.35x | 1.87x | 7.57x | 4.40x | 6.56x | 8.93x | -68.89x | - | - |
| Non-Operating Income | 373.44M | 370.3M | -1.48M | 0 | 0 | 0 | 5.71M | 14.31M | 95.41M | 789K | -208.47M | -141.65M | -107.06M | -98.75M | -61.15M | -17.61M | -4.42M | -38.64K | 235.71K | 0 |
| Pretax Income | -330.45M | -445.43M | 344.75M | -83.39M | 324.45M | 191.42M | -1.67B | 310.4M | -2.47M | 297.76M | 330.24M | 475.72M | 93.4M | 659.45M | 245.2M | 126.33M | 35.07M | -9.06M | 3.38M | 1.33M |
| Pretax Margin % | -43.19% | -73.55% | 40.76% | -13.02% | 2573.79% | -133.94% | 193.12% | 16.35% | -0.35% | 35.51% | 66.21% | 64.99% | 15.79% | 131.79% | 45.5% | 47.69% | 65.67% | -283.01% | 76.16% | 90.42% |
| Income Tax | 12.51M | 8.87M | 46.59M | 22.98M | 104.21M | 4.19M | -35.69M | -13.56M | 41.82M | -10.48M | 12.3M | -16.49M | -73.74M | 84.41M | -42.22M | -1.11M | -683K | -318K | 1.09M | 618.65K |
| Effective Tax Rate % | -3.79% | -1.99% | 13.51% | -27.55% | 32.12% | 2.19% | 2.14% | -4.37% | -1695.3% | -3.52% | 3.73% | -3.47% | -78.95% | 12.8% | -17.22% | -0.88% | -1.95% | 3.51% | 32.16% | 46.41% |
| Net Income | -342.96M | -454.3M | 298.17M | -106.37M | 220.24M | 187.23M | -1.63B | 323.96M | -44.29M | 348.57M | 353.28M | 492.21M | 167.14M | 579.04M | 291.91M | 127.43M | 35.76M | -8.84M | 2.06M | 714.57K |
| Net Margin % | -44.82% | -75.02% | 35.25% | -16.61% | 1747.1% | -131.01% | 188.99% | 17.06% | -6.25% | 41.56% | 70.83% | 67.24% | 28.25% | 115.72% | 54.17% | 48.1% | 66.95% | -275.99% | 46.35% | 48.47% |
| Net Income Growth % | -2309.09% | -252.36% | 380.31% | -148.3% | 17.63% | 111.49% | -603.19% | 831.46% | -112.71% | -1.33% | -28.23% | 194.49% | -71.14% | 98.36% | 129.07% | 256.4% | 504.59% | -529.24% | 188.12% | - |
| Funds From Operations (FFO) | 149.86M | -454.3M | 298.17M | -106.37M | 220.24M | 187.23M | -1.63B | 323.96M | -44.29M | 349.54M | 354.56M | 493.57M | 168.75M | 580.71M | 293.64M | 127.47M | 35.76M | -8.31M | 2.06M | 714.57K |
| FFO Margin % | 19.59% | -75.02% | 35.25% | -16.61% | 1747.1% | -131.01% | 188.99% | 17.06% | -6.25% | 41.68% | 71.09% | 67.43% | 28.52% | 116.06% | 54.49% | 48.12% | 66.95% | -259.49% | 46.35% | 48.47% |
| FFO Growth % | 0% | - | - | - | - | - | - | - | - | -1.42% | -28.16% | 192.48% | -70.94% | 97.76% | 130.36% | - | - | - | - | - |
| FFO per Share | 1.38 | -4.36 | 2.64 | -1.11 | 2.29 | 2.51 | -23.83 | 4.84 | -0.86 | 7.43 | 8.15 | 10.81 | 3.69 | 13.24 | 9.69 | 10.32 | 12.78 | -2.67 | 0.66 | 0.49 |
| FFO Payout Ratio % | 82.66% | -37.61% | 62.95% | -185.8% | 106.87% | 103.34% | -12.24% | 142.96% | -611.03% | 120.98% | 93.6% | 77.31% | 169.21% | 101.85% | 114.19% | 93.98% | 75.85% | 0% | 0% | 0% |
| EPS (Diluted) | -3.17 | -4.36 | 2.37 | -1.60 | 2.13 | 1.72 | -23.83 | 3.72 | -0.86 | 7.24 | 8.08 | 10.80 | 3.68 | 13.20 | 9.60 | 10.32 | 12.80 | -2.81 | 0.64 | 0.48 |
| EPS Growth % | -648.1% | -283.97% | 248.13% | -175.12% | 23.84% | 107.22% | -740.59% | 532.56% | -111.88% | -10.4% | -25.19% | 193.48% | -72.12% | 37.5% | -6.98% | -19.38% | 555.52% | -539.06% | 33.33% | - |
| EPS (Basic) | - | -4.36 | 2.41 | -1.60 | 2.15 | 1.72 | -23.83 | 3.72 | -0.86 | 7.40 | 8.08 | 10.80 | 3.68 | 13.20 | 9.68 | 10.32 | 12.80 | -3.05 | 0.64 | 0.48 |
| Diluted Shares Outstanding | 108.21M | 104.16M | 113.09M | 95.67M | 96.08M | 74.51M | 68.4M | 66.96M | 51.51M | 47.03M | 43.51M | 45.66M | 45.75M | 43.87M | 30.3M | 12.35M | 2.8M | 3.12M | 3.12M | 1.45M |
MSR valuation and basis risk
As reported in recent financial filings, Two Harbors experienced significant revenue fluctuations, including a 3.2% growth in 2026Q1 following a period of sharp contraction, suggesting that the company's reliance on mortgage servicing rights and RMBS carry remains highly sensitive to broader interest rate and origination cycles.
The erratic revenue trajectory appears to reflect the inherent difficulty in balancing a portfolio between interest-rate-sensitive RMBS and the fee-generating MSR platform. Investors should monitor whether the recent stabilization in revenue signals a successful pivot toward the captive servicing model or merely a temporary reprieve from market volatility.
Based on the provided income statement data, the company's NOI margin dropped to 55.7% in 2026Q1 from historical levels exceeding 100%, indicating that the cost of maintaining the servicing platform and financing the RMBS portfolio is currently exerting significant pressure on property-level profitability metrics.
The collapse in NOI margins suggests that the operational costs associated with the RoundPoint integration may be higher than anticipated during periods of market stress. This compression implies that the company's ability to generate net interest income is being severely hampered by the rising cost of repo financing.
According to the latest quarterly data, Two Harbors reported FFO of $37.5M in 2026Q1, yet the lack of consistent historical FFO reporting makes it difficult to assess the long-term sustainability of dividend payouts or the underlying quality of earnings relative to the company's volatile GAAP net income.
The emergence of FFO as a primary metric is a positive step for transparency, but the absence of prior-period data limits the ability to gauge growth trends. Analysts should remain skeptical of dividend safety until a more robust track record of FFO generation is established to cover distributions.
As evidenced by the extreme swings in net income, ranging from a $433.2M loss in 2023Q4 to a $276.7M gain in 2024Q4, the company's GAAP results appear heavily distorted by mark-to-market adjustments on MSRs and hedging instruments that do not necessarily reflect actual cash flow performance.
The disconnect between GAAP net income and operational reality suggests that investors should prioritize cash-based metrics over headline earnings. The reliance on Level 3 inputs for MSR valuations may introduce significant subjectivity, potentially masking underlying asset quality issues or overstating the value of the servicing portfolio.
Quick answers to the most common questions about buying TWO stock.
For fiscal year 2025, Two Harbors Investment Corp. (TWO) reported total revenue of $605.6M. This represents a 40980.0% increase compared to $1.5M in 2007.
Two Harbors Investment Corp. (TWO) reported a net loss of $454.3M for the fiscal year ending 2025.
Two Harbors Investment Corp. (TWO) reported an operating income of $415.8M, resulting in an operating profit margin of 68.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Two Harbors Investment Corp. (TWO) generated $592.9M in gross profit for the year, representing a gross profit margin of 97.9%. This demonstrates the company's core pricing power and production efficiency.