PennyMac’s Q3 2025 earnings rise 33% on strong revenue growth
PennyMac posted net sales of $632.9 million in the third quarter of 2025, up 42% quarter-over-quarter and 54% higher year-over-year. Costs rose 8% to $396.5 million between the second and third quarters.
“PennyMac Financial delivered excellent financial and operating results in the third quarter, with a return on equity of 18 percent,” said David Spector, the company’s chairman and CEO, in a statement. “In manufacturing, profitability nearly doubled from the previous quarter. The increase reflected a strong recovery from our consumer lending business, combined with the continued expansion of our broker-direct presence, as our partners increasingly see the value in entrusting their borrowers’ mortgage experience to us.
“Our servicing portfolio continues to grow organically, reaching nearly $720 billion in UPB. The asset’s strong core performance was highlighted in the third quarter by the success of our hedging program, which offset declines in MSR fair value and demonstrated the financial stability at the heart of our business model.”
PennyMac’s manufacturing segment generated $122.9 million in pre-tax revenue in the third quarter of 2025, up from $57.8 million in the second quarter of 2025, but slightly down from the $129.4 million in the third quarter of 2024. Further boost is expected in the near future after the company launched a range of non-QM products through its correspondent division in September launched.
The total number of loans purchased and originated by the company, including loans originated through this loan PennyMac Mortgage Investment Trust, fell 4% from the second quarter to $36.5 billion in unpaid principal (UPB). But that was still 15% higher compared to the same period last year.
Correspondents acquired UPB’s $3.3 billion in conforming and jumbo loans in the third quarter, up 8% from the second quarter and down 44% from the third quarter of 2024.
PennyMac’s services segment continues to drive growth for the company as a whole. Pre-tax income rose to $157.4 million, compared to $54.2 million in the second quarter of 2025 and $3.3 million in the third quarter of 2024. The company attributed this mainly to reduced losses due to net valuations.
The company suffered $102.5 million in MSR fair market value losses in the third quarter, but that was largely offset by $98.3 million in hedging gains.
Spector reported PennyMac’s sale of a $12 billion MSR portfolio to UPB in early October Annaly Capital Management. Annaly’s presence has soared since entering the MSR segment in 2020 as it is now a top 10 mortgage-backed security manager.
“Importantly, we have retained the subservicing and recapture capabilities for this portfolio, accelerating the growth of our capital-light subservicing business and freeing up capital to deploy in new, higher coupon MSRs with greater recapture and return potential,” Spector said.
“This transaction, as well as the share repurchases completed during the quarter at attractive prices, underscore our long-standing track record as best stewards of shareholder capital, optimizing our balance sheet for continued execution and growth.”
PennyMac’s services portfolio continues to grow, up 2% quarter-over-quarter and 11% year-over-year to $716.6 billion in UPB at the end of September.
“Our profitability – bolstered by our growing service portfolio and industry-leading low-cost structure – is directly enhanced by our operational excellence and technological
benefits,” Spector added.
“The increases in efficiency and performance we are seeing across the business are being driven by
integrating artificial intelligence and advanced data optimization tools and accelerating their adoption Vesta‘s next-generation origination platform strategically positions us for continued success.”
