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On the consensus measure, AGNC reported third-quarter revenue of $402.0 million, below the $428.4 million consensus. Adjusted EPS was $0.37, also below the $0.39 consensus.
On the separate revenue measure, AGNC reported $1.2 billion, up from $903.0 million a year earlier. Diluted EPS was −$1.17, compared with $0.72 a year earlier. The filing attributes a $1.28 per diluted share comprehensive loss to Agency mortgage-backed securities underperforming AGNC’s interest-rate hedges.
AGNC’s filing says higher funding costs more than offset higher asset yields, contributing to a decline in net spread and dollar roll income from the prior quarter. Gross margin rose to 33.6% from 16.4% a year earlier, while operating margin fell to −113.5% from 89.3%. AGNC reported free cash flow of $404.0 million, compared with $153.0 million a year earlier.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.2 billion | $903.0 million | 32.4% |
| Diluted EPS | −$1.17 | $0.72 | −262.5% |
| Gross margin | 33.6% | 16.4% | 17.2 percentage points |
| Operating margin | −113.5% | 89.3% | −202.7 percentage points |
| Free cash flow | $404.0 million | $153.0 million | 164.1% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $0.37 | $0.39 | Missed by 5.13% |
| Revenue | $402.0 million | $428.4 million | Missed by 6.16% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
In its filing, AGNC said Treasury-market instability drove weakness in Agency residential mortgage-backed securities during the quarter. The company said its economic return on tangible common equity per share was -12.7%, comprising $0.36 of dividends declared per share and a $1.45 decline in tangible book value per share.
AGNC said it shifted its portfolio toward higher-coupon securities and added longer-term Treasury hedges as rates rose. The filing says the hedge ratio increased to 97% at September 30 from 82% at June 30.
Guidance
In its filing, AGNC said it expects new Agency mortgage-backed securities supply for the remainder of 2026 and into 2027 to be materially lower than previously anticipated.