Core Insights - The article discusses the historical relationship between private credit and the energy sector, particularly shale oil and gas, before the current focus on software companies [1][2] - It highlights the significant borrowing by U.S. energy companies during the shale boom, with high yield energy issuance reaching approximately $290 billion from 2008 to 2014 [2] - The article draws parallels between the challenges faced by energy companies during the oil price collapse and the current situation of software companies in private credit [3] Group 1: Historical Context - During the shale boom, energy companies were major users of leveraged finance, with their weight in the high-yield index increasing from 10% to nearly 15% by 2014 [2] - The collapse of oil prices from $98 per barrel to $48 per barrel severely impacted shale producers, leading to increased risk for lenders [3] Group 2: Apollo's Role - Apollo, a significant alternative asset manager, had substantial exposure during the energy price trauma through its private credit lending corporation, Apollo Investment Corporation (AINV), which was later renamed MidCap Financial Investment Corporation (MFIC) [4][5] - The price of AINV declined by 48% from 2014 to 2016, reflecting the volatility and challenges faced by investors in the sector [6] Group 3: Investment Dynamics - MFIC had 17% of its portfolio exposed to the oil and gas sector at its peak, providing insights into potential future scenarios for private credit investors [7] - The article discusses the progression of interest payments and the eventual realization of losses when borrowers cannot meet their obligations [8] Group 4: Investor Experience - Investors who remained invested in AINV since 2013 experienced a 9% distribution yield initially, but faced capital losses, resulting in an overall return of approximately 2% per annum after 12 years [11][12] - The article emphasizes the psychological aspects of investing, noting that discomfort is a common experience and that investors often misinterpret their returns [10][15] Group 5: Broader Implications - The article suggests that discomfort in investing is inevitable, and investors should be aware of the historical patterns and management responses during challenging times [14] - It highlights the importance of understanding the range of potential returns and the psychological factors influencing investor behavior [15]

Financial Performance - Net investment income per share for the quarter was $0.39, a slight increase from $0.38 for the previous quarter [2] - Net investment income for the year ended December 31, 2025, was $141.995 million, compared to $133.296 million for 2024, reflecting a growth of 6.4% [30] - Total expenses for the year ended December 31, 2025, were $180.357 million, up from $169.255 million in 2024 [30] - The company reported a net realized loss of $50.126 million for the year ended December 31, 2025 [30] Asset and Investment Overview - Net asset value (NAV) per share decreased to $14.18, down 3.3% from $14.66 in the prior quarter [3] - Total assets as of December 31, 2025, were $3.32 billion, with net assets of $1.31 billion [6] - Total assets increased from $3,190.95 million in December 2024 to $3,323.64 million in December 2025 [28] - Net assets decreased from $1,404.646 million in December 2024 to $1,307.261 million in December 2025 [28] - The net asset value per share decreased from $14.98 in December 2024 to $14.18 in December 2025 [28] Investment Commitments and Repurchases - New investment commitments during the quarter totaled $141 million, with gross fundings of $156 million [3] - The company repurchased 1,091,753 shares at an average price of $11.81, costing $12.9 million, resulting in $0.03 per share NAV accretion [3] - The company has authorized a new $100 million stock repurchase plan to capitalize on stock trading at a discount to NAV [4] Debt and Leverage - The company's net leverage ratio was 1.45x as of December 31, 2025 [6] - As of December 31, 2025, outstanding debt obligations totaled $2.0 billion, with available capacity under the credit facility at $669 million [17] Investment Strategy and Management - MidCap Financial Investment Corporation primarily invests in first lien senior secured loans to U.S. middle-market companies with less than $75 million in EBITDA [34] - The company aims to generate current income and long-term capital appreciation through its diversified investment strategy [34] - MidCap Financial is externally managed by Apollo Investment Management, L.P., an affiliate of Apollo Global Management, Inc. [34] Market and Economic Conditions - MidCap Financial's performance is subject to changes in economic conditions, interest rates, and market outlook [35] - Forward-looking statements indicate potential future operating results and distribution projections, but are subject to risks and uncertainties [35] - The investment return and principal value of investments may fluctuate, and shares may be worth more or less than their original cost [33] Regulatory and Investor Information - The company has filed a prospectus with the SEC, which includes important information for investors regarding risks and investment objectives [31] - Investors are encouraged to read the base prospectus for complete information about the company and its offerings [31] - The company has no obligation to update forward-looking statements, but advises investors to consult future SEC filings for additional disclosures [35]

Financial Performance - The total return for the year ended December 31, 2025, was -4.3%, down from 11.1% in 2024[26]. - For the year ended December 31, 2025, the company invested $1.3 billion across 54 new and 156 existing portfolio companies, compared to $1.6 billion across 167 new and 130 existing portfolio companies in 2024[26]. - For the fiscal years ended December 31, 2025, 2024, and 2023, the company incurred base management fees of $24.24 million, $19.45 million, and $17.37 million, respectively[72]. - The performance-based incentive fees for the same fiscal years were $16.10 million, $21.55 million, and $24.57 million, respectively[72]. - The company must achieve annual returns on its total assets of at least 3.34% to cover annual interest payments on its outstanding indebtedness as of December 31, 2025[171]. Investment Strategy - The company targets middle-market companies with less than $75 million in EBITDA for its investments[24]. - The company completed the acquisition of Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc. on July 22, 2024, following stockholder approvals[21]. - The investment adviser conducts due diligence that includes reviewing historical and prospective financial information, on-site visits, and interviews with management and customers[46][49]. - Investments are typically structured as secured loans with maturities ranging from three to ten years, providing downside protection and attractive risk-adjusted returns[51]. - The company may seek to securitize its debt investments in the future to increase returns and the number of investments[41]. Portfolio Composition - As of December 31, 2025, the portfolio consisted of 247 companies, with 95% invested in secured debt, 0% in unsecured debt, 1% in preferred equity, and 4% in common equity/interests and warrants[27]. - As of December 31, 2025, 100% of the direct origination portfolio was floating rate debt, compared to 99% as of December 31, 2024[29]. - As of December 31, 2025, the top portfolio companies accounted for 16.6% of the total portfolio, with ChyronHego Corporation at 4.4% and Merx Aviation Finance, LLC at 3.2%[45]. - For the year ending December 31, 2024, the top portfolio companies represented 20.7% of the total portfolio, with Merx Aviation Finance, LLC leading at 6.1% and ChyronHego Corporation at 4.7%[45]. Risk Factors - The company is exposed to interest rate risks, with the majority of its debt investments based on floating rates, which may lead to fluctuations in investment value[112]. - An increase in interest rates could adversely affect the company's net investment income and the attractiveness of its common stock[111]. - The company may face challenges in raising or accessing debt capital due to current market conditions, which could impact its ability to make new commitments[101]. - Significant market disruptions could negatively affect the valuations of the company's investments, potentially leading to liquidity issues[102]. - The company acknowledges the potential impact of geopolitical tensions and economic conditions on its business operations and financial results[100]. Regulatory and Compliance - The company is subject to the Sarbanes-Oxley Act of 2002, which requires ongoing compliance monitoring of its policies and procedures[95]. - The company must distribute at least 90% of its investment company taxable income to maintain its status as a Regulated Investment Company (RIC), which is essential to avoid corporate-level income tax[153]. - The company is prohibited from participating in certain transactions with affiliates without prior approval, which may limit investment opportunities[187]. - The company has adopted co-investment policies to comply with regulatory requirements, but there is no assurance of co-investment opportunities with affiliates[188]. Operational Risks - The company has no employees; all services are provided by third parties, including the investment adviser, which manages day-to-day operations[68]. - The company is exposed to risks associated with artificial intelligence and machine learning technology, which could lead to operational, legal, and regulatory challenges[141]. - Climate change poses significant risks to the company's operations and portfolio companies, including regulatory impacts and physical risks from extreme weather events[144]. - Cybersecurity incidents pose risks to the company and its portfolio companies, potentially leading to operational disruptions and financial losses[210]. Market Conditions - Economic activity is accelerating, but global supply chain issues may lead to rising energy prices and persistent inflation, affecting profit margins[115]. - Price declines and illiquidity in corporate debt markets have adversely affected the fair value of portfolio investments, reducing net asset value[119]. - Changes in trade policies and tariffs could adversely impact market conditions and the liquidity of investments[123]. - The Federal Reserve raised the target rate four times in 2023, increasing the fed funds rate by approximately three percentage points in six months[129].

Core Viewpoint - Apollo Global Management's Chief Investment Officer, Torsten Sl?k, identifies stagflation as one of the biggest risks for the Federal Reserve in the coming year, which could threaten the upward momentum of the stock market due to the potential for further interest rate cuts [1] Group 1 - The recent mild inflation data for November has provided temporary relief to investors, but concerns about stagflation remain [1] - Sl?k emphasizes that stagnant inflation poses risks, particularly if certain headwinds emerge, especially in the context of artificial intelligence not delivering expected results [1] - There are downward risks to growth and upward risks to consumer prices in the new year, according to Sl?k [1]

Financial Performance - Net investment income per share for the quarter was $0.38, a decrease of 2.6% from $0.39 for the quarter ended June 30, 2025[1] - Net investment income for the three months ended September 30, 2025, was $35,307,000, compared to $38,135,000 for the same period in 2024, indicating a decrease of 4.8%[28] - The company reported total investment income of $82,576,000 for the three months ended September 30, 2025, slightly up from $82,138,000 in 2024[28] - Management fees increased to $6,069,000 for the three months ended September 30, 2025, compared to $4,428,000 in the same period of 2024, representing a rise of 37.1%[28] - The company experienced net realized losses of $19,167,000 for the three months ended September 30, 2025, compared to net realized gains of $487,000 in the same period of 2024[28] Asset and Liability Overview - Net asset value per share as of September 30, 2025, was $14.66, down 0.6% from $14.75 as of June 30, 2025[2] - Total assets as of September 30, 2025, were $3.31 billion, down from $3.46 billion as of June 30, 2025[7] - Total assets increased to $3,309,494,000 from $3,190,950,000 as of December 31, 2024, reflecting a growth of approximately 3.7%[26] - Total liabilities increased to $1,941,574,000 as of September 30, 2025, from $1,786,304,000 at the end of 2024, marking an increase of approximately 8.7%[26] - The company’s cash and cash equivalents decreased to $62,502,000 as of September 30, 2025, from $74,357,000 at the end of 2024[26] Investment Activities - New investment commitments during the quarter totaled $138 million, with gross fundings of $142 million[1] - The company received a net repayment of approximately $97 million from Merx Aviation Finance, reducing its exposure to 3.3% of the total portfolio[1] - The company upsized and extended the maturity of Bethesda CLO 1, increasing its size from $402.4 million to $646.4 million[19] - As of September 30, 2025, the portfolio composition consists of 95% first lien secured debt, with a weighted average yield of 10.2%[23] - The available remaining capacity under the Facility was $575 million as of September 30, 2025[14] Shareholder Returns - The Board declared a dividend of $0.38 per share, payable on December 23, 2025[3] - The company did not repurchase any shares during the quarter, with a total of 16,069,776 shares repurchased since the inception of the program[12] Forward-Looking Statements - MFIC's forward-looking statements include expectations regarding future operating results and business prospects, which are subject to various risks and uncertainties[33] - The company anticipates potential impacts from supply chain disruptions, tariffs, trade disputes, and changes in financial markets, which could affect actual results[33] - MFIC's forward-looking statements are based on information available as of the date of the release and do not obligate the company to update them[33]

Investment Activities - As of September 30, 2025, the company made investments totaling $400.4 million in the three months ended September 30, 2025, and $911.9 million in the nine months ended September 30, 2025[515]. - The company repaid investments amounting to $510.9 million in the three months ended September 30, 2025, and $818.3 million in the nine months ended September 30, 2025[515]. - The portfolio composition as of September 30, 2025, included 95% in first lien secured debt, with a weighted average yield of 10.2%[517]. - Total invested capital since the initial public offering in April 2004 reached $26.6 billion across 837 portfolio companies by September 30, 2025[519]. - The company has raised approximately $2.68 billion in net proceeds from additional offerings of common stock since its inception[505]. - The company has exited 12 portfolio companies in the three months ended September 30, 2025, and 30 companies in the nine months ended September 30, 2025[515]. Financial Performance - Total investment income for the three months ended September 30, 2025 was $82.6 million, consistent with $82.1 million for the same period in 2024, despite a decrease in average yield from 11.5% to 10.3%[536][538]. - For the nine months ended September 30, 2025, total investment income increased by $22.9 million, primarily driven by higher interest income due to a larger income-bearing investment portfolio from recent mergers[540]. - The net investment income for the three months ended September 30, 2025 was $35.3 million, down from $38.1 million in the same period of 2024[536]. - The net increase in net assets resulting from operations for the three months ended September 30, 2025 was $27.5 million, compared to $26.7 million in 2024[536]. Expenses and Debt Management - Net expenses for the three months ended September 30, 2025 increased by $3.3 million to $47.3 million, largely due to a $2.9 million rise in management and performance-based incentive fees[541]. - Average debt outstanding rose from $1.7 billion for the three months ended September 30, 2024 to $1.9 billion for the same period in 2025, contributing to increased interest and other debt expenses[541]. - The total annualized cost of debt decreased from 7.4% in Q3 2024 to 6.5% in Q3 2025, reflecting improved debt management[541]. - For the nine months ended September 30, 2025, net expenses increased by $13.1 million, primarily due to a $10 million rise in interest and other debt expenses attributed to higher average debt outstanding[542]. - The company has a total debt obligation of $1.92 billion as of September 30, 2025, with $1.66 billion in aggregate lender commitments under the Senior Secured Facility[555]. Realized and Unrealized Gains/Losses - For the three months ended September 30, 2025, the company recognized net realized losses of $19.2 million, primarily due to the write-off of Ambrosia Buyer Corp. and the restructure of New Era Technology, Inc.[543]. - During the nine months ended September 30, 2025, the company reported net realized losses of $33.3 million, driven by restructures of Renovo, Mitel Networks, and New Era Technology, along with a partial write-off of Ambrosia Buyer Corp.[546]. - The company recognized gross unrealized gains of $44.7 million and gross unrealized losses of $33.4 million for the three months ended September 30, 2025, resulting in a net change in unrealized gains of $11.3 million[548]. - For the nine months ended September 30, 2025, the company reported gross unrealized gains of $66.8 million and gross unrealized losses of $63.6 million, leading to a net change in unrealized losses of $3.2 million[549]. Distributions and Cash Management - Distributions paid to stockholders during the three months ended September 30, 2025 totaled $35.5 million ($0.38 per share), compared to $54.4 million ($0.58 per share) in the same period of 2024[558]. - The company believes its current cash and cash equivalents, along with anticipated cash flows from operations, will be adequate to meet cash needs for daily operations for at least the next twelve months[553]. - The company plans to utilize cash equivalents to enhance investment flexibility, including potential purchases of U.S. Treasury bills[554]. - The company must distribute at least 90% of its ordinary income and realized net short-term capital gains to maintain its RIC status, but it currently expects to generate cumulative net capital gains in the foreseeable future due to substantial net capital loss carryforwards[559]. Interest Rate Risk Management - The company regularly measures its exposure to interest rate risk and assesses whether hedging transactions are necessary to mitigate this exposure[569]. - A 150 basis point increase in interest rates could result in an estimated increase of $14.7 million in net investment income, while a 150 basis point decrease could lead to a decrease of $14.0 million[570]. - The company may use standard hedging instruments to protect against interest rate fluctuations, but such activities may also limit benefits from lower interest rates[571]. Corporate Governance - The company appointed Joseph Durkin as Chief Accounting Officer effective September 4, 2025[521]. - The company maintains an "opt out" dividend reinvestment plan for common stockholders, allowing them to receive cash dividends unless they choose to reinvest[560]. - Income from origination, structuring, closing, commitment, and other upfront fees associated with investments in portfolio companies is treated as taxable income and distributed to stockholders[562]. - The fair value of the company's investments may fluctuate significantly due to the lack of readily available market values, which could impact realized gains or losses[566].

Financial Performance - Net investment income per share for the quarter was $0.39, an increase of 5.4% from $0.37 for the quarter ended March 31, 2025[2] - Total investment income for the three months ended June 30, 2025, was $81,247, an increase of 17.5% compared to $69,156 for the same period in 2024[22] - Net investment income for the six months ended June 30, 2025, reached $70,680, up 21.7% from $58,084 in the prior year[22] - Earnings per share for the three months ended June 30, 2025, was $0.19, down from $0.35 in the same period of 2024[22] Asset and Liability Management - Total assets increased to $3.46 billion, up from $3.36 billion as of March 31, 2025[6] - Total assets increased to $3,461,883, up from $3,190,950 as of December 31, 2024, representing a growth of 8.5%[20] - The debt outstanding rose to $2.05 billion, compared to $1.94 billion in the previous quarter[6] - Debt increased to $2,051,654, a rise of 17.1% from $1,751,621 as of December 31, 2024[20] - The net leverage ratio increased to 1.44x as of June 30, 2025, up from 1.31x[6] Investment Activity - New investment commitments during the quarter totaled $262 million, with gross fundings of $254 million[2] - Net fundings for the quarter amounted to $144 million, reflecting a significant increase in investment activity[2] - The company expects a net repayment of approximately $90 million from Merx Aviation Finance, reducing its exposure to 2.8% of the total portfolio at fair value[3] Net Asset Value - Net asset value per share decreased to $14.75, down 1.2% from $14.93 as of March 31, 2025[2] - Net assets decreased to $1,375,921 from $1,404,646, reflecting a decline of 2.0%[20] Fees and Losses - Management fees increased to $6,079 for the three months ended June 30, 2025, compared to $4,389 in 2024, marking a rise of 38.5%[22] - Performance-based incentive fees decreased to $3,849 from $5,572, a decline of 30.9% year-over-year[22] - The company reported net realized losses of $17,238 for the three months ended June 30, 2025, compared to losses of $15,638 in the same period of 2024[22] - The net change in unrealized gains for the three months ended June 30, 2025, was a loss of $1,044, contrasting with a gain of $8,652 in the same period of 2024[22] Dividend Declaration - The company declared a dividend of $0.38 per share, payable on September 25, 2025[2] Portfolio Yield - The weighted average yield on the total portfolio was 9.2% as of June 30, 2025[17]

Investment Activity - As of June 30, 2025, the company made investments totaling $288.7 million in the three months ended June 30, 2025, compared to $245.4 million in the same period of 2024, and $680.6 million in the six months ended June 30, 2025, compared to $398.2 million in 2024[504] - The company reported net investment activity of $144.0 million for the three months ended June 30, 2025, and $314.4 million for the six months ended June 30, 2025, compared to $90.5 million and $106.4 million in 2024, respectively[504] - The company has invested a total of $26.2 billion in 828 portfolio companies since its initial public offering[509] Portfolio Composition - The portfolio composition as of June 30, 2025, included 93% in first lien secured debt, with a weighted average yield of 10.4%[506] - The company’s floating rate debt portfolio amounted to $3.0 billion as of June 30, 2025, representing 99% of the total debt portfolio[506] - As of June 30, 2025, $3.25 billion, or 97.7%, of the Company's investments were classified as Level 3, indicating a high proportion of investments with unobservable inputs[519] Financial Performance - For the three months ended June 30, 2025, total investment income increased to $81.2 million, up from $69.2 million in the same period of 2024, primarily driven by a $12.0 million increase in interest income[530] - Interest income for the three months ended June 30, 2025, was $75.7 million, compared to $65.5 million for the same period in 2024, reflecting a higher income-bearing investment portfolio[530] - Net investment income for the three months ended June 30, 2025, was $36.4 million, compared to $29.5 million for the same period in 2024[530] Losses and Gains - Net realized losses for the three months ended June 30, 2025, were $(17.2) million, compared to $(15.6) million for the same period in 2024[530] - Net change in unrealized gains for the three months ended June 30, 2025, was $1.0 million, driven by increased fair market values of certain investments[539] - The company recognized gross unrealized gains of $35.2 million and losses of $43.2 million for the six months ended June 30, 2025, resulting in a net change in unrealized losses of $8 million[542] Debt and Expenses - Total debt obligations as of June 30, 2025, amounted to $2,057.9 million, with $1,221.9 million due in less than one year[549] - The company has $433.6 million of unused capacity under its Senior Secured Facility as of June 30, 2025[549] - Average debt outstanding rose from $1.4 billion for the three months ended June 30, 2024, to $1.9 billion for the same period in 2025, contributing to a $5.5 million increase in interest and other debt expenses[535] Management and Governance - The Company has initiated a search for a successor to Howard Widra, who plans to retire as Executive Chairman effective December 31, 2026[513] - Kenneth Seifert has been appointed as Chief Financial Officer and Treasurer, effective June 30, 2025, following Gregory Hunt's resignation[512] Distributions and Capital Management - Distributions paid to stockholders for the three months ended June 30, 2025, totaled $35.5 million ($0.38 per share), compared to $24.8 million ($0.38 per share) for the same period in 2024, reflecting a year-over-year increase of 43.1%[552] - The company must distribute at least 90% of its ordinary income and realized net short-term capital gains to maintain its RIC status, which may limit future distributions[554] - The company has substantial net capital loss carryforwards and does not expect to generate cumulative net capital gains in the foreseeable future[554] Interest Rate Sensitivity - The estimated annual impact on net investment income from a 150 basis point increase in interest rates is projected to be $14.2 million, equating to $0.148 per share[567] - Interest rate sensitivity indicates that changes in interest rates could materially affect net investment income, as a portion of investments is funded through borrowings[563] - The company may hedge against interest rate fluctuations using standard hedging instruments, which could limit participation in benefits from lower interest rates[567] Other Financial Metrics - Management and performance-based incentive fees for the three months ended June 30, 2025, were $9.9 million, slightly down from $10.0 million in the same period of 2024[530] - Total annualized cost of debt decreased from 7.5% for the three months ended June 30, 2024, to 6.8% for the same period in 2025[535] - The average yield for the total debt portfolio decreased from 12.0% for the three months ended June 30, 2024, to 10.5% for the three months ended June 30, 2025[532]

[Executive Summary & Highlights](index=1&type=section&id=executive-summary-highlights) [Quarterly Financial Performance Overview](index=1&type=section&id=quarterly-financial-performance-overview) MidCap Financial Investment Corporation reported a net investment income of $0.37 per share for Q1 2025, a decrease from $0.40 per share in Q4 2024. Net asset value per share also slightly decreased to $14.93 from $14.98. The Board declared a dividend of $0.38 per share | Metric | Q1 2025 | Q4 2024 | Change (QoQ) | | :----- | :------ | :------ | :----------- | | Net Investment Income per share | $0.37 | $0.40 | -$0.03 | | Net Asset Value (NAV) per share | $14.93 | $14.98 | -$0.05 | - The Board declared a dividend of **$0.38 per share** payable on June 26, 2025, to stockholders of record as of June 10, 2025[3](index=3&type=chunk)[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=ceo-commentary) CEO Tanner Powell highlighted solid first-quarter results, including healthy earnings, reduced non-accruals, and strong portfolio growth. The company continued to deploy investment capacity from recent mergers into MidCap Financial originated assets, partially offset by sales of non-directly originated assets. Stock was repurchased below NAV, and the CEO sees potential opportunities despite market volatility - Reported **solid first quarter results** including a healthy level of earnings, a **reduction in non-accruals**, and **strong portfolio growth**[4](index=4&type=chunk) - Continued to **deploy investment capacity** generated from recent mergers into assets originated by MidCap Financial, partially offset by ongoing sales and repayments of non-directly originated assets[4](index=4&type=chunk) - **Repurchased some stock below NAV** during the quarter and believes the current environment may **present opportunities** that MidCap Financial and MFIC are well-equipped to capitalize on[4](index=4&type=chunk) [Key Operational & Financial Highlights](index=1&type=section&id=key-operational-financial-highlights) Key highlights for Q1 2025 include $0.37 net investment income per share, a NAV of $14.93 per share (down 0.3% QoQ), $376 million in new investment commitments, $357 million in gross fundings, and $170 million in net fundings. The net leverage ratio was 1.31x. The company repurchased 476,656 shares for $6.1 million and completed a $529.6 million CLO transaction | Metric | Value (Q1 2025) | Previous Period (Q4 2024) | Change | | :----- | :-------------- | :------------------------ | :----- | | Net investment income per share | $0.37 | $0.40 | -$0.03 | | Net asset value per share | $14.93 | $14.98 | -0.3% | | New investment commitments | $376 million | N/A | N/A | | Gross fundings (excl. revolver) | $357 million | N/A | N/A | | Net fundings (incl. revolvers) | $170 million | N/A | N/A | | Net leverage | 1.31x | 1.16x | +0.15x | - **Repurchased 476,656 shares** of common stock at a weighted average price per share of **$12.75**, inclusive of commissions, for an aggregate **cost of $6.1 million** during the quarter[5](index=5&type=chunk) - **Completed Collateralized Loan Obligation ("CLO") transaction**, MFIC Bethesda CLO 2 LLC, a **$529.6 million CLO** secured by middle market loans in February 2025[5](index=5&type=chunk) [Financial Performance](index=3&type=section&id=financial-performance) [Summary Financial Metrics](index=3&type=section&id=summary-financial-metrics) Total assets increased to $3.36 billion as of March 31, 2025, from $3.19 billion in the prior quarter. The investment portfolio grew to $3.19 billion. Debt outstanding rose to $1.94 billion, leading to an increase in the debt-to-equity ratio to 1.39x and net leverage ratio to 1.31x. NAV per share slightly declined | Metric ($ in billions, except per share data) | March 31, 2025 | December 31, 2024 | Change (QoQ) | | :------------------------------------- | :------------- | :---------------- | :----------- | | Total assets | $3.36 | $3.19 | +$0.17 | | Investment portfolio (fair value) | $3.19 | $3.01 | +$0.18 | | Debt outstanding | $1.94 | $1.75 | +$0.19 | | Net assets | $1.39 | $1.40 | -$0.01 | | Net asset value per share | $14.93 | $14.98 | -$0.05 | | Debt-to-equity ratio | 1.39x | 1.25x | +0.14x | | Net leverage ratio | 1.31x | 1.16x | +0.15x | [Operating Results Analysis](index=3&type=section&id=operating-results-analysis) Net investment income for Q1 2025 was $34.3 million, up from $28.5 million in Q1 2024. However, net realized and change in unrealized losses increased to $4.0 million from $3.1 million year-over-year. This resulted in a net increase in net assets from operations of $30.3 million, compared to $25.5 million in the prior year. Earnings per share decreased to $0.32 from $0.39 YoY | Metric (in millions, except per share) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :------------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Net investment income | $34.3 | $28.5 | +$5.8 | | Net realized and change in unrealized gains (losses) | ($4.0) | ($3.1) | -$0.9 | | Net increase in net assets resulting from operations | $30.3 | $25.5 | +$4.8 | | Net investment income on per average share basis | $0.37 | $0.44 | -$0.07 | | Earnings per share — basic | $0.32 | $0.39 | -$0.07 | - Total investment income increased to **$78.7 million** in Q1 2025 from **$68.3 million** in Q1 2024, primarily driven by higher interest income from non-controlled/non-affiliated investments[23](index=23&type=chunk) - Total expenses increased to **$45.2 million** in Q1 2025 from **$39.9 million** in Q1 2024, mainly due to higher management fees, performance-based incentive fees, and interest and other debt expenses[23](index=23&type=chunk) [Balance Sheet Overview](index=7&type=section&id=balance-sheet-overview) As of March 31, 2025, total assets were $3.36 billion, with investments at fair value totaling $3.19 billion. Debt outstanding was $1.94 billion, and total liabilities were $1.96 billion. Net assets stood at $1.39 billion, resulting in a net asset value per share of $14.93 | Metric (in thousands) | March 31, 2025 | December 31, 2024 | Change (QoQ) | | :-------------------- | :------------- | :---------------- | :----------- | | Total Assets | $3,355,699 | $3,190,950 | +$164,749 | | Investments at fair value | $3,188,621 | $3,012,416 | +$176,205 | | Debt | $1,935,242 | $1,751,621 | +$183,621 | | Total Liabilities | $1,962,439 | $1,786,304 | +$176,135 | | Net Assets | $1,393,260 | $1,404,646 | -$11,386 | | Net Asset Value Per Share | $14.93 | $14.98 | -$0.05 | - Cash and cash equivalents increased to **$83.7 million** as of March 31, 2025, from **$74.4 million** as of December 31, 2024[21](index=21&type=chunk) [Portfolio and Investment Activity](index=3&type=section&id=portfolio-investment-activity) [Investment Activity Summary](index=3&type=section&id=investment-activity-summary) Investments made in portfolio companies significantly increased to $391.9 million in Q1 2025 from $152.8 million in Q1 2024. After accounting for sales and repayments, net investment activity was $170.4 million, a substantial increase from $15.9 million year-over-year. The number of portfolio companies grew to 240, adding 20 new companies while exiting 13 | Metric (in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Investments made in portfolio companies | $391.9 | $152.8 | +$239.1 | | Investments sold | ($43.9) | — | -$43.9 | | Investments repaid | ($177.6) | ($136.9) | -$40.7 | | Net investment activity | $170.4 | $15.9 | +$154.5 | | Portfolio companies at end of period | 240 | 154 | +86 | | Number of investments in new portfolio companies | 20 | 7 | +13 | | Number of exited companies | (13) | (5) | -8 | [Portfolio Composition and Yields](index=6&type=section&id=portfolio-composition-yields) As of March 31, 2025, the portfolio remained heavily concentrated in first lien secured debt at 93% of fair value. Total secured debt accounted for 93% of the portfolio. The weighted average yield for first lien secured debt was 10.5%, and for the total debt portfolio was 10.5%. The portfolio is predominantly floating rate, representing 99% of the total | Portfolio Composition (at fair value) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------------------ | :------------- | :---------------- | :------------- | | First lien secured debt | 93% | 92% | 90% | | Second lien secured debt | 0% | 1% | 1% | | Total secured debt | 93% | 93% | 91% | | Common equity/interests and warrants | 5% | 5% | 7% | | Weighted Average Yields (at amortized cost) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | :------------- | | First lien secured debt | 10.5% | 10.8% | 12.0% | | Total debt portfolio | 10.5% | 10.8% | 12.0% | | Total portfolio | 9.4% | 9.5% | 10.0% | - The portfolio is predominantly floating rate, with **99% of the total interest rate type** at fair value being floating rate as of March 31, 2025[18](index=18&type=chunk) [Capital Management & Liquidity](index=4&type=section&id=capital-management-liquidity) [Share Repurchase Program](index=4&type=section&id=share-repurchase-program) During Q1 2025, the Company repurchased 476,656 shares for $6.1 million at a weighted average price of $12.75, representing a 14.72% discount to the average NAV per share. Since inception, the program has repurchased 16,069,776 shares for $254.2 million, with $20.8 million remaining under the current $275 million authorization - During the three months ended March 31, 2025, the Company **repurchased 476,656 shares** at a weighted average price per share of **$12.75** for a **total cost of $6.1 million**, representing a discount of approximately **14.72%** of the average net asset value per share[11](index=11&type=chunk) - Since the inception of the share repurchase program and through May 12, 2025, the Company repurchased **16,069,776 shares** for a **total cost of $254.2 million**, leaving a maximum of **$20.8 million available** for future purchases under the current Board authorization of **$275 million**[12](index=12&type=chunk) [Liquidity and Debt Obligations](index=4&type=section&id=liquidity-debt-obligations) As of March 31, 2025, total outstanding debt obligations were $1.942 billion, comprising Senior Unsecured Notes, Class A-1 Notes in MFIC Bethesda CLO 1 LLC, secured debt in MFIC Bethesda CLO 2 LLC, and outstanding amounts under its multi-currency revolving credit facility. The Company had $548 million in available remaining capacity under its revolving credit facility | Debt Obligation Type | Amount (as of March 31, 2025) | | :------------------- | :---------------------------- | | Total outstanding debt obligations | $1.942 billion | | Senior Unsecured Notes (2026 Notes) | $125 million | | Senior Unsecured Notes (2028 Notes) | $80 million | | Class A-1 Notes (MFIC Bethesda CLO 1 LLC) | $232 million | | Secured debt (MFIC Bethesda CLO 2 LLC) | $399 million | | Multi-currency revolving credit facility | $1,106 million outstanding | - The available remaining capacity under the multi-currency revolving credit facility was **$548 million** as of March 31, 2025[14](index=14&type=chunk) [Corporate Information & Disclosures](index=5&type=section&id=corporate-information-disclosures) [Investor Relations & Supplemental Information](index=5&type=section&id=investor-relations-supplemental-information) The Company will host a conference call on May 13, 2025, at 8:30 a.m. EDT, with details provided for participation and replay. A supplemental information package is also available on the Company's website to provide additional transparency - A **conference call will be hosted on Tuesday, May 13, 2025, at 8:30 a.m. Eastern Time**, with telephonic and webcast replay options available[16](index=16&type=chunk) - A **supplemental information package is provided** to offer more transparency into financial results and is available in the Shareholders section of the Company's website[17](index=17&type=chunk) [Company Profile](index=9&type=section&id=company-profile) MidCap Financial Investment Corporation (MFIC) is a closed-end, externally managed BDC and RIC, managed by an affiliate of Apollo Global Management. Its investment objective is to generate current income and long-term capital appreciation, primarily by investing in directly originated first lien senior secured loans to privately held U.S. middle-market companies - MidCap Financial Investment Corporation (NASDAQ: MFIC) is a **closed-end, externally managed, diversified management investment company** that has elected to be treated as a **business development company ("BDC") and a regulated investment company ("RIC")**[27](index=27&type=chunk) - The Company's investment objective is to **generate current income and, to a lesser extent, long-term capital appreciation**[27](index=27&type=chunk) - The Company **primarily invests in directly originated and privately negotiated first lien senior secured loans** to privately held U.S. middle-market companies[27](index=27&type=chunk) [Important Disclosures](index=9&type=section&id=important-disclosures) The report includes important information regarding investment considerations, SEC filings, and disclaimers about the nature of the communication as not an offer to sell securities. It also explicitly states that past performance is not indicative of future results and contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially - Investors are advised to **carefully consider the investment objective, risks, charges and expenses** of the Company before investing and to read the prospectus filed with the SEC[24](index=24&type=chunk) - **Past performance is not indicative of, or a guarantee of, future performance**, and **investment return and principal value of an investment will fluctuate**[26](index=26&type=chunk) - The press release contains **forward-looking statements that involve risks and uncertainties**, and certain factors could cause actual results and conditions to differ materially from those projected[28](index=28&type=chunk) [Contact Information](index=11&type=section&id=contact-information) Contact information for investor relations is provided for Elizabeth Besen, Investor Relations Manager at MidCap Financial Investment Corporation - **Elizabeth Besen, Investor Relations Manager** for MidCap Financial Investment Corporation, can be contacted at **212.822.0625 or ebesen@apollo.com**[30](index=30&type=chunk)

Financial Performance - Total investment income for the three months ended March 31, 2025 was $78.7 million, an increase of $10.4 million or 15.2% compared to $68.3 million for the same period in 2024, primarily driven by an increase in interest income[509][511]. - Net investment income for the three months ended March 31, 2025 was $34.3 million, up from $28.5 million in 2024, reflecting a year-over-year increase of 20.4%[509]. - Net expenses increased by $4.6 million to $44.4 million for the three months ended March 31, 2025, primarily due to a rise in interest and other debt expenses attributed to an increase in average debt outstanding from $1.4 billion to $1.8 billion[512]. - The average yield for the total debt portfolio decreased from 12.0% in Q1 2024 to 10.7% in Q1 2025, indicating a decline in income-generating efficiency[511]. - The Company recognized net realized gains of $3.1 million for the three months ended March 31, 2025, compared to net realized losses of $8.1 million in the same period of 2024[513][514]. - During Q1 2025, the Company experienced a net change in unrealized losses of $7.0 million, driven by underperformance in several investments including Renovo and AVAD, LLC[515]. Investment Activity - For the three months ended March 31, 2025, the company made investments totaling $391.9 million, compared to $152.8 million in the same period of 2024[485]. - The net investment activity for the three months ended March 31, 2025, was $170.4 million, significantly up from $15.9 million in 2024[485]. - As of March 31, 2025, the portfolio companies increased to 240 from 154 at the end of the previous year[485]. - The company has completed transactions with more than 100 different financial sponsors since its inception[490]. Debt and Financing - As of March 31, 2025, floating rate debt represented 99% of the total debt portfolio, amounting to $2.9 billion[487]. - The company's total debt obligations as of March 31, 2025, amounted to $1.942 billion, with $1.106 billion due in more than five years[521]. - The majority of the company's debt portfolio investments bore interest at variable rates, which are generally SOFR-based[536]. - The company may hedge against interest rate fluctuations using standard hedging instruments, although this may limit participation in benefits from lower interest rates[539]. - The estimated annual impact on net investment income from a 150 basis point increase in interest rates is projected to be $14.0 million, equating to $0.151 per share[539]. Asset Valuation - As of March 31, 2025, $3.11 billion or 97.5% of the Company's investments were classified as Level 3, indicating a high reliance on unobservable inputs for valuation[498]. - The Company’s investment valuation process involves a multi-step approach, utilizing both observable and unobservable inputs to determine fair value, particularly for Level 3 investments[500][506]. - The fair value of investments may fluctuate significantly due to market conditions and other events, which may lead to realized gains or losses differing from current valuations[507]. Shareholder Distributions - Distributions paid to stockholders during the three months ended March 31, 2025, totaled $35.6 million ($0.38 per share), compared to $24.8 million ($0.38 per share) in the same period of 2024[524]. Operational Outlook - The company expects general and administrative operating expenses to increase moderately in dollar terms during ongoing operations[484]. - The company believes its current cash and cash equivalents, along with anticipated cash flows from operations, will be adequate to meet cash needs for daily operations for at least the next twelve months[518]. - The company has substantial net capital loss carryforwards and does not expect to generate cumulative net capital gains in the foreseeable future[526]. Non-qualifying Assets - Non-qualifying assets represented approximately 8.5% of the total assets of the company as of March 31, 2025[480].