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Sep 30
AFC Gamma Q3 2025 Earnings Report
Reported a GAAP net loss of $12.5 million and Distributable Earnings of $3.5 million in Q3 2025.
Key Takeaways
AFC Gamma reported a GAAP net loss but delivered positive Distributable Earnings in Q3 2025, while shareholders approved a strategic shift from REIT to BDC.
GAAP net loss totaled $12.5 million for Q3 2025.
Distributable Earnings reached $3.5 million, or $0.16 per share.
Shareholders approved conversion from REIT to BDC, expanding investment flexibility.
Provision for expected credit losses increased significantly to $7.4 million.
AFC Gamma
AFC Gamma
Forward Guidance
Following shareholder approval, AFC plans to convert from a REIT to a BDC in Q1 2026 to broaden its lending scope and investment flexibility.
Positive Outlook
- BDC conversion enables investments beyond real estate-backed loans.
- Management sees lending opportunities in lower-middle market.
- Portfolio repositioning continues with focus on resolving nonaccruals.
- Active evaluation of new opportunities expected to improve returns.
- Dividend of $0.15 per share paid for Q3 2025.
Challenges Ahead
- Reported GAAP net loss of $12.5 million.
- Large unrealized non-cash losses impacted net income.
- Substantial provision for credit losses recorded.
- TRS operations contributed to net losses.
- Limited new capital flowing into the cannabis market.