Core Viewpoint - Fidus Investment (FDUS) reported quarterly earnings of $0.54 per share, exceeding the Zacks Consensus Estimate of $0.53 per share, but down from $0.59 per share a year ago, indicating a slight earnings surprise of 1.89% [1][2] Financial Performance - The company achieved revenues of $36.5 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.04% and showing an increase from $34.65 million year-over-year [2] - Over the last four quarters, Fidus Investment has exceeded consensus EPS estimates three times and topped revenue estimates four times [2] Stock Performance - Fidus Investment shares have declined approximately 10.6% since the beginning of the year, compared to a decline of 4.3% for the S&P 500 [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.53 on revenues of $36.03 million, while for the current fiscal year, the estimate is $2.14 on revenues of $147.18 million [7] - The trend of estimate revisions for Fidus Investment has been favorable leading up to the earnings release [6] Industry Context - The Financial - SBIC & Commercial Industry, to which Fidus Investment belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Fidus Investment may be influenced by the overall outlook for the industry [8]

Overview - Fidus Investment Corporation has a diversified investment portfolio totaling $1.2 billion as of March 31, 2025[12] - The company targets firms with annual revenues between $10 million and $150 million[20] - Fidus' senior investment professionals have an average of over 25 years of relevant experience[32] Investment Strategy & Performance - Fidus targets investments between $5 million and $35 million per portfolio company[18] - The company's investment close rate is just 2.8% of opportunities sourced[26] - The cumulative realized net capital gains are $182.8 million[38] - The adjusted NAV per share at March 31, 2025, was $19.39, a 34.1% premium to the IPO level of $14.46[38] Portfolio & Financial Review - The weighted average debt yield of the investment portfolio is 13.2%[48] - Secured debt investments constitute 81.4% of the portfolio[50] - Equity represents 11.9% of portfolio fair value versus cost of 7.6%[59]

Investment Strategy and Portfolio - Fidus Investment Corporation provides customized debt and equity financing solutions to lower middle-market companies with revenues between $10.0 million and $150.0 million[300]. - The investment strategy aims to generate attractive risk-adjusted returns through current income from debt investments and capital appreciation from equity investments[300]. - Investments typically range from $5.0 million to $35.0 million per portfolio company, with a focus on maintaining a diversified portfolio[304]. - Equity investments may include direct minority equity investments or warrants to buy equity interests, typically made in conjunction with debt investments[309]. - The investment portfolio consisted of 92 active portfolio companies as of March 31, 2025, compared to 87 active portfolio companies as of December 31, 2024[314][315]. - The Information Technology Services sector represented 35.3% of the portfolio's fair value as of March 31, 2025, up from 34.0% at the end of 2024[324]. Debt Investments - First lien debt investments are secured by a first priority lien on existing and future assets of the borrower, providing a senior position in the capital structure[305]. - Second lien debt investments rank junior to first lien debt but still provide security interests in the assets of the portfolio company[307]. - Subordinated debt investments are typically unsecured and rank subordinate to first and second lien debt, often featuring higher fixed interest rates[308]. - As of March 31, 2025, 72.8% of the debt investment portfolio, or $740.3 million, bore interest at a variable rate[314]. - First lien debt represented 69.4% of the fair value of the investment portfolio as of March 31, 2025, compared to 65.8% as of December 31, 2024[317]. - As of March 31, 2025, debt investments in 52 portfolio companies bore interest at a variable rate, representing $740.3 million, or 72.8% of the portfolio on a fair value basis[378]. Financial Performance - For the three months ended March 31, 2025, the company invested $115.6 million in debt and equity investments, compared to $145.9 million in the same period of 2024, reflecting a decrease of 20.8%[312]. - Total investment income for the three months ended March 31, 2025, was $36.5 million, an increase of $1.8 million or 5.3% from $34.7 million in the same period of 2024[327][328]. - Interest income rose to $30.3 million, up 7.8% from $28.1 million in the prior year, while dividend income surged by 210.1% to $1.2 million[327][328]. - Net investment income increased by $0.6 million, or 3.4%, to $18.2 million during the three months ended March 31, 2025[331]. - The company recorded net unrealized appreciation of $5.6 million as of March 31, 2025, down from $15.3 million as of December 31, 2024[314][315]. - Total net realized gain on investments for the three months ended March 31, 2025, was $13.3 million, significantly higher than the $1.7 million recorded for the same period in 2024[334][335]. Expenses and Cash Management - Total expenses, including income tax provision, increased by $1.3 million or 7.3% to $18.3 million for the three months ended March 31, 2025, compared to $17.0 million in 2024[329][331]. - Interest and financing expenses increased by 12.7% to $6.8 million for the three months ended March 31, 2025, compared to $6.0 million in 2024[329][331]. - The company had $67.5 million in cash and cash equivalents, with total net assets amounting to $677.9 million as of March 31, 2025[338]. - The company experienced a net increase in cash and cash equivalents of $10.3 million for the three months ended March 31, 2025[340]. Risk Factors and Market Conditions - Risks include economic downturns, interest rate volatility, and geopolitical conditions that could impact portfolio companies and investment opportunities[296]. - The company is closely monitoring market volatility and its potential impact on portfolio companies amid economic uncertainties[323]. - The company’s net investment income is sensitive to changes in market interest rates, with potential material adverse effects from significant rate changes[379]. - The Federal Reserve held interest rates steady in Q1 2025, following three consecutive rate reductions in late 2024, with future rate reductions uncertain[378]. Capital Structure and Funding - Fund III and Fund IV received their SBIC licenses, allowing for enhanced returns through SBA-guaranteed debentures[302]. - The company anticipates funding its investment activities through a combination of additional debt and equity capital[341]. - The Credit Facility was increased from $100.0 million to $140.0 million on July 25, 2024, with a maturity date extended to August 17, 2027[343]. - As of March 31, 2025, the company had no borrowings outstanding under its Credit Facility[382]. - The company received exemptive relief from the SEC to exclude senior securities issued by SBIC Funds from the asset coverage ratio requirement, enabling more debt capital for investments[352]. Shareholder Returns - A regular quarterly dividend of $0.43 per share and a supplemental dividend of $0.11 per share were declared, payable on June 25, 2025[375]. - The stock repurchase program allows for the acquisition of up to $5.0 million of outstanding common stock, extended through December 31, 2025[355]. - The company did not make any repurchases of common stock during the three months ended March 31, 2025 and 2024[355].

[First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) Fidus Investment Corporation reported strong Q1 2025 financial results, marked by significant investment income, NAV growth, and strategic portfolio management [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Fidus Investment Corporation reported Q1 2025 total investment income of $36.5 million, net investment income of $18.2 million, and a $19.39 NAV per share, reflecting strong quarterly performance Q1 2025 Key Financial Metrics | Metric | Value | Per Share | | :--- | :--- | :--- | | Total Investment Income | $36.5 million | N/A | | Net Investment Income (NII) | $18.2 million | $0.53 | | Adjusted NII | $18.5 million | $0.54 | | Net Asset Value (NAV) | $677.9 million | $19.39 | | Investments Made | $115.6 million | N/A | | Proceeds from Repayments/Realizations | $57.3 million | N/A | | Spillover Income | $47.4 million | $1.36 | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasized a disciplined investment approach, focusing on high-quality businesses, which led to successful equity monetizations and a healthy portfolio - The company continues its disciplined strategy of investing in high-quality, cash-flow-generative businesses with defensive characteristics[3](index=3&type=chunk) - Monetized two equity investments for a net realized gain of **$11.5 million**, or **$0.33 per share**, which helped increase the **NAV**[3](index=3&type=chunk) - The investment portfolio is considered well-diversified and healthy, constructed to generate attractive risk-adjusted returns[3](index=3&type=chunk) [Detailed Financial Results](index=2&type=section&id=First%20Quarter%202025%20Financial%20Results) The company's Q1 2025 operating results show a 5.3% increase in total investment income and a 3.4% rise in net investment income year-over-year [Operating Results (Q1 2025 vs. Q1 2024)](index=2&type=section&id=Operating%20Results%20(Q1%202025%20vs.%20Q1%202024)) Q1 2025 saw total investment income rise 5.3% to $36.5 million, with net investment income increasing 3.4% to $18.2 million, despite a decrease in NII per share due to higher share count Comparison of Operating Results (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Investment Income | $36,496 | $34,651 | 5.3% | | Total Expenses | $18,273 | $17,044 | 7.2% | | Net Investment Income (NII) | $18,222 | $17,627 | 3.4% | | NII per Share | $0.53 | $0.57 | (7.0%) | | Adjusted NII | $18,509 | $18,126 | 2.1% | | Adjusted NII per Share | $0.54 | $0.59 | (8.5%) | | Net Realized Gain on Investments | $11,480 | $1,799 | 538.1% | - The **$1.8 million** YoY increase in total investment income was mainly due to a **$2.4 million** rise in interest income from a larger average debt portfolio and an **$0.8 million** increase in dividend income, partially offset by a **$1.2 million** decrease in interest on idle funds[6](index=6&type=chunk) - Total expenses rose by **$1.3 million** YoY, primarily driven by a **$0.8 million** increase in interest and financing expenses and a **$0.6 million** net increase in base management fees[7](index=7&type=chunk) [Portfolio, Investment Activity, and Liquidity](index=3&type=section&id=Portfolio%2C%20Investment%20Activity%2C%20and%20Liquidity) This section details the company's investment portfolio status, recent investment activities, and its current liquidity and capital resources [Portfolio Status and Investment Activities](index=3&type=section&id=Portfolio%20Status%20and%20Investment%20Activities) As of March 31, 2025, the investment portfolio reached $1.2 billion across 92 companies, with a 13.2% weighted average yield on debt investments - The investment portfolio totaled **$1.2 billion** at fair value as of March 31, 2025, spread across **92** active portfolio companies[10](index=10&type=chunk) - The weighted average yield on debt investments was **13.2%**, with variable-rate debt constituting **$740.3 million**, or **72.8%** of the debt portfolio's fair value[10](index=10&type=chunk) - Invested in seven new portfolio companies during Q1 2025, including AMOpportunities, Inc., Case IQ, and Fraser Steel LLC[11](index=11&type=chunk)[12](index=12&type=chunk) [Liquidity and Capital Resources](index=3&type=section&id=Liquidity%20and%20Capital%20Resources) Fidus maintained strong liquidity with $67.5 million in cash and $140.0 million available under its credit facility, bolstered by recent capital raises Liquidity and Capital as of March 31, 2025 | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $67.5 million | | Unused Credit Facility | $140.0 million | | SBA debentures outstanding | $182.0 million | | Notes outstanding | $350.0 million | | Weighted average interest rate on debt | 4.8% | - Raised net proceeds of **$20.7 million** from the at-the-market (ATM) equity program during the quarter[11](index=11&type=chunk) - Received net proceeds of **$96.9 million** from the issuance of **$100.0 million** in **6.75%** notes due March 2030[11](index=11&type=chunk) [Dividends and Corporate Actions](index=4&type=section&id=Dividends%20and%20Corporate%20Actions) This section outlines the declared dividends for the second quarter of 2025 and significant corporate events occurring after the quarter-end [Second Quarter 2025 Dividends](index=4&type=section&id=Second%20Quarter%202025%20Dividends) The Board declared total dividends of $0.54 per share for Q2 2025, comprising a $0.43 base and an $0.11 supplemental dividend Q2 2025 Dividend Declaration | Dividend Type | Amount per Share | | :--- | :--- | | Base Dividend | $0.43 | | Supplemental Dividend | $0.11 | | **Total Dividend** | **$0.54** | - The dividend is payable on June 25, 2025, to stockholders of record as of June 13, 2025[13](index=13&type=chunk) - The company has a dividend reinvestment plan (DRIP) that automatically reinvests dividends unless a stockholder opts out[15](index=15&type=chunk) [Subsequent Events](index=4&type=section&id=Subsequent%20Events) Post-quarter, Fidus made a $5.8 million investment in Laboratory Testing, LLC, exited Elements Brands, LLC, and issued additional SBA debentures - On April 15, 2025, invested a total of **$5.8 million** in debt and equity in Laboratory Testing, LLC[16](index=16&type=chunk) - On April 23, 2025, exited debt investments in Elements Brands, LLC, receiving full payment of **$3.7 million**[16](index=16&type=chunk) - On May 5, 2025, issued an additional **$10.0 million** in SBA debentures with a fixed interim interest rate of **5.163%**[17](index=17&type=chunk) [Financial Statements and Supplemental Information](index=6&type=section&id=Financial%20Statements%20and%20Supplemental%20Information) This section presents the consolidated financial statements, including balance sheets and statements of operations, along with a reconciliation of non-GAAP adjusted net investment income [Consolidated Statements of Assets and Liabilities](index=6&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of March 31, 2025, total assets increased to $1.24 billion, driving total net assets to $677.9 million and NAV per share to $19.39 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Investments, at fair value | $1,154,408 | $1,090,506 | | Cash and cash equivalents | $67,478 | $57,159 | | **Total Assets** | **$1,241,982** | **$1,164,112** | | Total Debt (SBA & Notes) | $521,427 | $417,261 | | **Total Liabilities** | **$564,052** | **$508,446** | | **Total Net Assets** | **$677,930** | **$655,666** | | **NAV per Share** | **$19.39** | **$19.33** | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2025, the company reported $36.5 million in total investment income and a net increase in net assets from operations of $19.7 million, or $0.58 per share Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Investment Income | $36,496 | $34,651 | | Total Expenses, net | $18,273 | $17,044 | | **Net Investment Income** | **$18,222** | **$17,627** | | Total Net Realized Gain | $13,330 | $1,743 | | Total Net Change in Unrealized (Depreciation) | ($9,793) | $1,218 | | **Net Increase in Net Assets** | **$19,658** | **$20,123** | | **Net Increase per Share** | **$0.58** | **$0.65** | [Reconciliation of Adjusted Net Investment Income (Non-GAAP)](index=8&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Investment%20Income%20(Non-GAAP)) The company's non-GAAP Adjusted NII for Q1 2025 was $18.5 million, or $0.54 per share, after excluding capital gains incentive fees - Adjusted NII is a non-GAAP measure that excludes capital gains incentive fee expenses or reversals, which management believes is a useful indicator of operations exclusive of these items[5](index=5&type=chunk)[29](index=29&type=chunk) Reconciliation of NII to Adjusted NII (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Investment Income (NII)** | **$18,222** | **$17,627** | | Capital gains incentive fee expense | $287 | $499 | | **Adjusted NII** | **$18,509** | **$18,126** | | **NII per Share** | **$0.53** | **$0.57** | | Capital gains incentive fee per share | $0.01 | $0.02 | | **Adjusted NII per Share** | **$0.54** | **$0.59** |

Core Insights - Fidus Investment Corporation reported a base dividend of $0.43 and a supplemental dividend of $0.11 per share for the second quarter of 2025, reflecting a commitment to returning value to shareholders [13] - The company achieved a net investment income of $18.2 million, or $0.53 per share, for the first quarter of 2025, representing a 3.4% increase compared to the same period in 2024 [9][6] - Total investment income for the first quarter of 2025 was $36.5 million, up 5.3% from $34.7 million in the first quarter of 2024 [6][7] Financial Performance - Interest income increased by $2.2 million, or 7.8%, to $30.3 million in Q1 2025 compared to Q1 2024, driven by higher average debt investment balances [5][7] - The company realized a net gain of $11.5 million from monetizing two equity investments, contributing positively to the net asset value (NAV) [3][10] - The NAV as of March 31, 2025, was $677.9 million, or $19.39 per share, reflecting a slight increase from $655.7 million at the end of 2024 [6][26] Investment Activities - Fidus invested $115.6 million in debt and equity securities during the first quarter of 2025, including seven new portfolio companies [6] - The fair value of the investment portfolio totaled $1.2 billion, consisting of 92 active portfolio companies [11] - The weighted average yield on debt investments was 13.2% as of March 31, 2025 [11] Expense Management - Total expenses for the first quarter of 2025 were $18.3 million, an increase of 7.3% from $17.0 million in Q1 2024, primarily due to higher interest and financing expenses [8][9] - The increase in expenses was attributed to a rise in average borrowings and weighted average interest rates [8] Future Outlook - The company declared dividends totaling $0.54 per share for the second quarter of 2025, indicating ongoing confidence in its financial stability [13] - Fidus continues to focus on building a diversified portfolio of high-quality investments with resilient business models [3]

Core Insights - The establishment of a separate investment account for BDC investments aims to enhance tracking and performance measurement of BDCs [1] Group 1: Investment Strategy - The investment account is designed to share progress and insights regarding BDC investments with stakeholders [1] Group 2: Analyst Background - Roberts Berzins has over a decade of experience in financial management, focusing on corporate financial strategies and large-scale financings [1] - Significant contributions include institutionalizing the REIT framework in Latvia to improve liquidity in pan-Baltic capital markets [1] - Involvement in developing national SOE financing guidelines and frameworks for private capital in affordable housing [1] - Holds a CFA Charter and an ESG investing certificate, with experience from an internship at the Chicago Board of Trade [1] - Actively participates in thought-leadership activities to support the development of pan-Baltic capital markets [1]

Core Viewpoint - Fidus Investment Corporation will report its first quarter 2025 financial results on May 8, 2025, and will host a conference call to discuss these results on May 9, 2025 [1][2]. Company Overview - Fidus Investment Corporation provides customized debt and equity financing solutions to lower middle-market companies, defined as U.S. companies with revenues between $10 million and $150 million [4]. - The company's investment objective is to generate attractive risk-adjusted returns through current income from debt investments and capital appreciation from equity-related investments [4]. - Fidus seeks to partner with business owners, management teams, and financial sponsors for financing related to ownership changes, recapitalizations, strategic acquisitions, and business expansions [4]. - Fidus is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940 [5]. - The company was formed in February 2011 and is licensed by the U.S. Small Business Administration as a Small Business Investment Company (SBIC) [5].

Core Insights - The article emphasizes the importance of innovation and disruption in the financial sector, particularly focusing on high-tech and early growth companies [1] Company and Industry Summary - The financial researcher highlights a beneficial long position in FDUS shares, indicating confidence in the company's future performance [2] - The article aims to provide insights into current events and significant news within the industry, suggesting potential investment opportunities [1]

Group 1 - Fidus Investment Corporation (FDUS) is identified as one of the six Business Development Companies (BDCs) held by the investor, with plans to reinvest all received dividends [1] Group 2 - Roberts Berzins has over a decade of experience in financial management, assisting top-tier corporates in shaping financial strategies and executing large-scale financings [2] - He has contributed to institutionalizing the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [2] - His policy-level work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [2] - Roberts is a CFA Charterholder and holds an ESG investing certificate, with experience from an internship at the Chicago Board of Trade [2] - He is actively involved in thought-leadership activities to support the development of pan-Baltic capital markets [2]

Group 1: Fidus Investment (FDUS) - Fidus Investment shares increased by 7.9% to close at $18.69, following a broader market rally due to President Trump's announcement of a 90-day tariff pause for non-retaliating nations [1] - The stock experienced a notable trading volume, with more shares traded than in a typical session, contrasting with a 19.6% loss over the past four weeks [1] - The consensus EPS estimate for the upcoming quarterly report is $0.53, reflecting a year-over-year decline of 10.2%, while revenues are expected to be $35.08 million, up 1.2% from the previous year [2] Group 2: Earnings Estimates and Trends - Over the last 30 days, the consensus EPS estimate for Fidus Investment has been revised 1.9% lower, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] - Fidus Investment is part of the Zacks Financial - SBIC & Commercial Industry, where another stock, Main Street Capital (MAIN), saw a 7.7% increase to $52.94, despite a -11.9% return over the past month [3] Group 3: Main Street Capital (MAIN) - Main Street Capital's consensus EPS estimate remains unchanged at $1, representing a 4.8% decline from the previous year [4] - Main Street Capital currently has a Zacks Rank of 4 (Sell), indicating a negative outlook [4]