Financial Performance - Net investment income for the quarter ended June 30, 2025, was $364 million, or $039 per share[9] - Net realized and change in unrealized losses on investments for the quarter were $(180) million, or $(020) per share[9] - Net asset value per share decreased by 12% to $1475 as of the end of the quarter[9] Investment Portfolio - The total investment portfolio amounted to $333 billion, diversified across 249 portfolio companies and 51 industries[10] - Direct origination and other investments represented 92% of the total portfolio[10] - Non-accrual investments accounted for 20% of the total portfolio at fair value[10] - New investment commitments totaled $262 million across 31 companies, averaging $844 million per commitment[9] Portfolio Composition & Characteristics - The direct origination portfolio was primarily composed of first lien loans, representing 99% of the portfolio[10] - The direct origination portfolio was 100% floating rate[10] - Sponsored investments accounted for 90% of the direct origination portfolio[10] Funding and Leverage - Gross fundings for the quarter, excluding revolver fundings, totaled $254 million[9] - Net fundings, including revolvers, totaled $144 million for the quarter[9] - The company's net leverage ratio was 144x as of June 30, 2025[9]

Core Insights - MidCap Financial Investment (MFIC) reported revenue of $81.25 million for the quarter ended June 2025, reflecting a year-over-year increase of 17.5% [1] - The earnings per share (EPS) for the quarter was $0.39, down from $0.45 in the same quarter last year [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $81.65 million, resulting in a revenue surprise of -0.5% [1] - The company achieved an EPS surprise of +5.41%, exceeding the consensus estimate of $0.37 [1] Financial Performance Metrics - Interest income was reported at $75.7 million, which is a 15.6% increase year-over-year but below the average estimate of $80.07 million from three analysts [4] - Other income was reported at $0.2 million, significantly lower than the estimated $0.73 million, representing a year-over-year decline of 77.8% [4] - Dividend income also fell to $0.2 million, compared to the estimated $0.55 million, marking a 33.3% decrease from the previous year [4] Stock Performance - Over the past month, shares of MidCap Financial have returned -4.3%, contrasting with the Zacks S&P 500 composite's increase of +2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - MidCap Financial Investment (MFIC) reported quarterly earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, but down from $0.45 per share a year ago, indicating a mixed performance in earnings despite a positive surprise this quarter [1][2]. Financial Performance - The company posted revenues of $81.25 million for the quarter ended June 2025, which missed the Zacks Consensus Estimate by 0.5% and represents an increase from $69.16 million year-over-year [2]. - Over the last four quarters, MidCap Financial has surpassed consensus EPS estimates two times, but has not beaten consensus revenue estimates during the same period [2]. Stock Performance - MidCap Financial shares have declined approximately 6.7% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3]. - The current consensus EPS estimate for the upcoming quarter is $0.38 on revenues of $82.39 million, and for the current fiscal year, it is $1.50 on revenues of $325.08 million [7]. Industry Outlook - The Financial - Miscellaneous Services industry, to which MidCap Financial belongs, is currently ranked in the top 25% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]. - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact MidCap Financial's stock performance [5].

[Executive Summary & Recent Highlights](index=1&type=section&id=1.%20Executive%20Summary%20%26%20Recent%20Highlights) [Q2 2025 Financial Performance Overview](index=1&type=section&id=1.1%20Q2%202025%20Financial%20Performance%20Overview) MidCap Financial Investment Corporation reported a net investment income of $0.39 per share for Q2 2025, an increase from the previous quarter, while net asset value per share saw a slight decrease. The Board declared a dividend of $0.38 per share Key Financial Metrics (Per Share) | Metric | Q2 2025 (June 30, 2025) | Q1 2025 (March 31, 2025) | Change | | :------------------------ | :---------------------- | :--------------------- | :----- | | Net Investment Income per share | $0.39 | $0.37 | +$0.02 | | Net Asset Value (NAV) per share | $14.75 | $14.93 | -$0.18 (-1.2%) | - The Board declared a dividend of **$0.38 per share** payable on September 25, 2025, to stockholders of record as of September 9, 2025[2](index=2&type=chunk) [Key Operational and Strategic Highlights](index=1&type=section&id=1.2%20Key%20Operational%20and%20Strategic%20Highlights) The company made significant new investment commitments and fundings during the quarter, maintained its credit rating, and appointed a new CFO. A notable post-quarter event includes an expected substantial repayment from Merx Aviation Finance, reducing portfolio exposure - New investment commitments made during the quarter totaled **$262 million**[2](index=2&type=chunk) - Gross fundings, excluding revolver fundings, totaled **$254 million** for the quarter[2](index=2&type=chunk) - Net fundings, including revolvers, totaled **$144 million** for the quarter[2](index=2&type=chunk) - Net leverage was **1.44x** as of June 30, 2025[2](index=2&type=chunk) - KBRA affirmed MFIC's **BBB- rating** and maintained its **Positive Outlook** in June[2](index=2&type=chunk) - Kenneth Seifert was appointed Chief Financial Officer and Treasurer, effective June 30, 2025[2](index=2&type=chunk) - The Company expects to receive a net repayment of approximately **$90 million** from Merx Aviation Finance, LLC, during the September quarter, reducing its exposure to approximately **2.8%** of the total portfolio, at fair value[2](index=2&type=chunk)[3](index=3&type=chunk) [CEO Commentary](index=2&type=section&id=1.3%20CEO%20Commentary) CEO Tanner Powell highlighted continued disciplined capital deployment into MidCap Financial-sourced assets despite a competitive environment. He noted that NAV declined due to challenges faced by a few companies but expressed optimism regarding the expected significant repayment from Merx Aviation Finance, anticipating accretive earnings from capital redeployment - The Company continued to deploy capital into assets sourced by MidCap Financial, maintaining disciplined underwriting despite a competitive environment[3](index=3&type=chunk) - NAV declined due to challenges faced by a handful of companies[3](index=3&type=chunk) - Merx Aviation Finance successfully completed a sale transaction and received additional payments from insurers, expected to lead to a post-quarter net repayment of approximately **$90 million** to MFIC, reducing the investment in Merx by nearly half[3](index=3&type=chunk) - The redeployment of capital from Merx is expected to be accretive to earnings going forward[3](index=3&type=chunk) [Financial Performance Analysis](index=3&type=section&id=2.%20Financial%20Performance%20Analysis) [Consolidated Financial Highlights](index=3&type=section&id=2.1%20Consolidated%20Financial%20Highlights) The company's total assets and investment portfolio increased from March 31, 2025, to June 30, 2025, while net asset value per share slightly decreased. Debt and leverage ratios also saw an increase over the quarter Financial Highlights (in billions, except per share data) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total assets | $3.46 | $3.36 | $3.19 | $3.22 | $2.55 | | Investment portfolio (fair value) | $3.33 | $3.19 | $3.01 | $3.03 | $2.44 | | Debt outstanding | $2.05 | $1.94 | $1.75 | $1.77 | $1.51 | | Net assets | $1.38 | $1.39 | $1.40 | $1.42 | $1.00 | | Net asset value per share | $14.75 | $14.93 | $14.98 | $15.10 | $15.38 | | Debt-to-equity ratio | 1.49 x | 1.39 x | 1.25 x | 1.25 x | 1.51 x | | Net leverage ratio | 1.44 x | 1.31 x | 1.16 x | 1.16 x | 1.45 x | [Operating Results](index=3&type=section&id=2.2%20Operating%20Results) For the three months ended June 30, 2025, Net Investment Income increased year-over-year, but the company experienced a significant increase in net realized and unrealized losses, leading to a decrease in net assets resulting from operations and basic earnings per share compared to the prior year Consolidated Operating Results (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net investment income | $36.4 | $29.5 | $70.7 | $58.1 | | Net realized and change in unrealized gains (losses) | $(18.3) | $(7.0) | $(22.2) | $(10.0) | | Net increase in net assets resulting from operations | $18.1 | $22.6 | $48.4 | $48.0 | | Net investment income on per average share basis | $0.39 | $0.45 | $0.76 | $0.89 | | Net realized and change in unrealized gain (loss) per share | $(0.20) | $(0.11) | $(0.24) | $(0.15) | | Earnings per share — basic | $0.19 | $0.35 | $0.52 | $0.74 | [Investment Income Breakdown](index=8&type=section&id=2.2.1%20Investment%20Income%20Breakdown) Total investment income for the three months ended June 30, 2025, increased to $81.2 million from $69.2 million in the prior year, primarily driven by higher interest income from non-controlled/non-affiliated investments Investment Income (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income (excl. PIK) - Non-controlled/non-affiliated | $70,230 | $60,146 | $138,301 | $120,142 | | PIK interest income - Non-controlled/non-affiliated | $4,770 | $2,438 | $9,171 | $4,433 | | Total Investment Income | $81,247 | $69,156 | $159,945 | $137,486 | [Expenses Analysis](index=8&type=section&id=2.2.2%20Expenses%20Analysis) Total expenses for the three months ended June 30, 2025, increased to $45.1 million from $39.9 million in the prior year, mainly due to higher interest and other debt expenses, partially offset by lower performance-based incentive fees Expenses (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Management fees | $6,079 | $4,389 | $12,140 | $8,775 | | Performance-based incentive fees | $3,849 | $5,572 | $10,282 | $11,610 | | Interest and other debt expenses | $32,581 | $26,992 | $63,044 | $53,170 | | Total expenses | $45,130 | $39,882 | $90,351 | $79,836 | [Net Investment Income](index=8&type=section&id=2.2.3%20Net%20Investment%20Income) Net investment income for the three months ended June 30, 2025, was $36.4 million, an increase of 23.4% compared to $29.5 million for the same period in 2024 - Net Investment Income for the three months ended June 30, 2025, was **$36,397 thousand**, up from **$29,541 thousand** in the prior year[22](index=22&type=chunk) - Net Investment Income for the six months ended June 30, 2025, was **$70,680 thousand**, compared to **$58,084 thousand** in the prior year[22](index=22&type=chunk) [Net Realized and Unrealized Gains (Losses)](index=8&type=section&id=2.2.4%20Net%20Realized%20and%20Unrealized%20Gains%20(Losses)) The company reported a net realized and change in unrealized losses of $18.3 million for the three months ended June 30, 2025, significantly higher than the $7.0 million loss in the prior year, primarily driven by increased net realized losses from non-controlled/non-affiliated investments and foreign currency transactions - Net realized losses for the three months ended June 30, 2025, totaled **$(17,238) thousand**, compared to **$(15,638) thousand** in the prior year[22](index=22&type=chunk) - Net change in unrealized losses for the three months ended June 30, 2025, was **$(1,044) thousand**, a decrease from a gain of **$8,652 thousand** in the prior year[22](index=22&type=chunk) - Total Net Realized and Change in Unrealized Gains (Losses) for the three months ended June 30, 2025, was **$(18,282) thousand**, compared to **$(6,986) thousand** in the prior year[22](index=22&type=chunk) [Earnings Per Share](index=8&type=section&id=2.2.5%20Earnings%20Per%20Share) Basic earnings per share for the three months ended June 30, 2025, decreased to $0.19 from $0.35 in the prior year, reflecting the impact of increased net realized and unrealized losses despite higher net investment income - Basic 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](index=22&type=chunk) - Basic Earnings Per Share for the six months ended June 30, 2025, was **$0.52**, down from **$0.74** in the same period of 2024[22](index=22&type=chunk) [Portfolio and Investment Activity](index=3&type=section&id=3.%20Portfolio%20and%20Investment%20Activity) [Investment Activity Summary](index=3&type=section&id=3.1%20Investment%20Activity%20Summary) Net investment activity for the three months ended June 30, 2025, was $144.0 million, a substantial increase from $90.5 million in the prior year, driven by higher investments made in portfolio companies. The number of portfolio companies increased to 249 Portfolio and Investment Activity (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Investments made in portfolio companies | $288.7 | $245.4 | $680.6 | $398.2 | | Investments sold | $(14.9) | — | $(58.9) | — | | Investments repaid | $(129.9) | $(154.9) | $(307.4) | $(291.7) | | Net investment activity | $144.0 | $90.5 | $314.4 | $106.4 | | Portfolio companies at end of period | 249 | 165 | 249 | 165 | | Number of investments in new portfolio companies | 14 | 18 | 34 | 25 | [Portfolio Composition and Yields](index=6&type=section&id=3.2%20Portfolio%20Composition%20and%20Yields) As of June 30, 2025, the portfolio primarily consisted of first lien secured debt (93%), with a weighted average yield of 10.4% for total secured debt. The vast majority (99%) of the portfolio's interest rate type is floating rate Portfolio Composition and Weighted Average Yields | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | First lien secured debt (fair value) | 93% | 93% | 92% | 91% | 90% | | Second lien secured debt (fair value) | 0% | 0% | 1% | 1% | 1% | | Total secured debt (fair value) | 93% | 93% | 93% | 92% | 91% | | Weighted average yield (Total secured debt, amortized cost) | 10.4% | 10.5% | 10.8% | 11.1% | 11.9% | | Floating rate, as percentage of total (fair value) | 99% | 99% | 99% | 99% | 100% | [Capital Structure and Liquidity](index=3&type=section&id=4.%20Capital%20Structure%20and%20Liquidity) [Consolidated Statements of Assets and Liabilities](index=7&type=section&id=4.1%20Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of June 30, 2025, total assets increased to $3.46 billion from $3.19 billion at December 31, 2024, primarily driven by an increase in investments at fair value. Total liabilities also increased, mainly due to higher debt outstanding Consolidated Statements of Assets and Liabilities (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------------------------- | :------------------------ | :---------------- | | Total Assets | $3,461,883 | $3,190,950 | | Investments at fair value (Non-controlled/non-affiliated) | $2,896,424 | $2,605,329 | | Debt | $2,051,654 | $1,751,621 | | Total Liabilities | $2,085,962 | $1,786,304 | | Net Assets | $1,375,921 | $1,404,646 | | Net Asset Value Per Share | $14.75 | $14.98 | [Debt and Liquidity Profile](index=4&type=section&id=4.2%20Debt%20and%20Liquidity%20Profile) The company's total outstanding debt obligations were $2,058 million as of June 30, 2025, composed of various senior unsecured notes, CLO notes, and a senior secured facility. The company had $409 million in available capacity under its Senior Secured Facility - Total outstanding debt obligations, excluding deferred financing cost and debt discount, totaled **$2,058 million** as of June 30, 2025[13](index=13&type=chunk) - Debt was comprised of **$125 million** Senior Unsecured Notes (due July 16, 2026), **$80 million** Senior Unsecured Notes (due December 15, 2028), **$232 million** Class A-1 Notes in MFIC Bethesda CLO 1 LLC, **$399 million** secured debt in MFIC Bethesda CLO 2 LLC, and **$1,222 million** outstanding under the Senior Secured Facility[13](index=13&type=chunk) - Available remaining capacity under the Senior Secured Facility was **$409 million** as of June 30, 2025[13](index=13&type=chunk) [Share Repurchase Program](index=4&type=section&id=4.3%20Share%20Repurchase%20Program) No shares were repurchased during the three months ended June 30, 2025. Since inception, the company has repurchased 16.1 million shares for $254.2 million, with $20.8 million remaining under the current authorization - No shares were repurchased during the three months ended June 30, 2025[11](index=11&type=chunk) - Since inception through August 8, 2025, the Company repurchased **16,069,776 shares** at a weighted average price of **$15.82 per share**, for a total cost of **$254.2 million**[11](index=11&type=chunk) - A maximum of **$20.8 million** remains available for future purchases under the current Board authorization of **$275 million**[11](index=11&type=chunk) [Corporate Information and Disclosures](index=5&type=section&id=5.%20Corporate%20Information%20and%20Disclosures) [Conference Call and Webcast Details](index=5&type=section&id=5.1%20Conference%20Call%20and%20Webcast%20Details) MidCap Financial Investment Corporation will host a conference call and webcast on August 12, 2025, to discuss its financial results, with replay options available - The Company will host a conference call on Tuesday, August 12, 2025, at **8:30 a.m. Eastern Time**[15](index=15&type=chunk) - A simultaneous webcast will be available on the Company's website at www.midcapfinancialic.com, with telephonic and audio webcast replays also available[15](index=15&type=chunk) [Supplemental Information](index=5&type=section&id=5.2%20Supplemental%20Information) The company offers a supplemental information package on its website to provide additional transparency and detail regarding its financial results - A supplemental information package is available in the Shareholders section of the Company's website under Presentations at www.midcapfinancialic.com[16](index=16&type=chunk) [About MidCap Financial Investment Corporation](index=9&type=section&id=5.3%20About%20MidCap%20Financial%20Investment%20Corporation) MidCap Financial Investment Corporation is a closed-end, externally managed business development company (BDC) advised by an affiliate of Apollo Global Management. Its primary objective is to generate current income and long-term capital appreciation by investing mainly in directly originated first lien senior secured loans to 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)[26](index=26&type=chunk) - The Company is externally managed by an Investment Adviser, an affiliate of Apollo Global Management, Inc[26](index=26&type=chunk) - Its investment objective is to generate current income and, to a lesser extent, long-term capital appreciation, primarily by investing in directly originated and privately negotiated first lien senior secured loans to privately held U.S. middle-market companies (generally defined as companies with less than **$75 million** in EBITDA)[26](index=26&type=chunk) [Important Information and Forward-Looking Statements](index=9&type=section&id=5.4%20Important%20Information%20and%20Forward-Looking%20Statements) The report includes standard disclaimers advising investors to review the prospectus for risks, noting that the information is not an offer to sell securities, and emphasizing that past performance does not guarantee future results. It also contains forward-looking statements subject to various risks and uncertainties - 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[23](index=23&type=chunk) - This communication does not constitute an offer to sell or the solicitation of an offer to buy securities[24](index=24&type=chunk) - Past performance is not indicative of, or a guarantee of, future performance, and investment return and principal value will fluctuate[25](index=25&type=chunk) - The press release contains forward-looking statements that involve risks and uncertainties, and actual results could differ materially from projections due to various factors[27](index=27&type=chunk) [Investor Relations Contact](index=11&type=section&id=5.5%20Investor%20Relations%20Contact) Contact information for investor relations is provided for inquiries - For investor relations inquiries, contact Elizabeth Besen, Investor Relations Manager, at **212.822.0625** or ebesen@apollo.com[29](index=29&type=chunk)

Investment Activity - For the three months ended June 30, 2025, the company made investments totaling $288.7 million, compared to $245.4 million in the same period of 2024, representing a 17.5% increase[502] - The net investment activity for the six months ended June 30, 2025, was $314.4 million, significantly higher than $106.4 million in the same period of 2024[502] - The company has invested a total of $26.2 billion in 828 portfolio companies since its initial public offering in April 2004[507] Portfolio Composition - As of June 30, 2025, the portfolio composition included 93% in first lien secured debt, consistent with the 93% reported at the end of 2024[504] - The weighted average yield on first lien secured debt was 10.4% as of June 30, 2025, down from 10.8% at the end of 2024[504] - The total portfolio yield was 9.2% as of June 30, 2025, compared to 9.5% at the end of 2024[504] - 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 private investments relative to total investments[517] Financial Performance - Total investment income for the three months ended June 30, 2025, was $81.2 million, an increase of $12.0 million compared to $69.2 million for the same period in 2024, primarily driven by higher interest income[528][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, reflecting a year-over-year increase[528] - Total investment income increased by $22.4 million for the six months ended June 30, 2025, primarily due to higher interest income from a larger income-bearing investment portfolio[531] Losses and Expenses - The Company reported net realized losses of $17.2 million for the three months ended June 30, 2025, compared to net realized losses of $15.6 million for the same period in 2024[528] - Interest and other debt expenses for the three months ended June 30, 2025, were $32.3 million, an increase from $26.8 million for the same period in 2024[528] - Net realized losses for the three months ended June 30, 2025, were $17.0 million, primarily due to the restructure of Renovo and Mitel Network, with significant losses of $9.8 million from Renovo[535] - For the six months ended June 30, 2025, net realized losses totaled $13.5 million, driven by restructures and partial write-offs, offset by gains from Orgain, Inc. and Heubach[536] Debt and Obligations - Total debt obligations as of June 30, 2025, amounted to $2,057.9 million, with $1,221.9 million due in more than 5 years[547] - The total annualized cost of debt decreased from 7.6% for the six months ended June 30, 2024, to 6.8% for the same period in 2025[534] - 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 $5.3 million increase in net expenses[533] Management and Governance - The Company appointed Kenneth Seifert as Chief Financial Officer and Treasurer, effective June 30, 2025, following the resignation of Gregory Hunt[510] - Howard Widra announced his intention to retire as Executive Chairman of the Board, effective December 31, 2026, prompting a search for his successor[511] Cash Flow and Distributions - The company expects current cash and cash equivalents, along with anticipated cash flows, to meet operational cash needs for at least the next twelve months[544] - 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%[550] - 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[552] - The company maintains an "opt out" dividend reinvestment plan, allowing stockholders to reinvest cash dividends into additional shares unless they choose to receive cash[553] Unrealized Gains and Losses - 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[540] - The net change in unrealized losses for the six months ended June 30, 2025, was $8 million, with significant unrealized gains from Merx Aviation Finance, LLC of $9.9 million[540] Interest Rate Sensitivity - A 150 basis point increase in interest rates is estimated to result in a $14.2 million increase in net investment income, equating to $0.148 per share[565] - As of June 30, 2025, the majority of the debt portfolio investments bore interest at variable rates, primarily SOFR-based, with durations of one to six months before resetting to current market rates[562] Asset Coverage and Limitations - The company may face limitations on distributions due to asset coverage tests applicable to BDCs and conditions of its revolving credit facility[554] - The fair value of investments may fluctuate significantly due to the lack of readily available market values, impacting the company's financial reporting[560] - The company has substantial net capital loss carryforwards and does not expect to generate cumulative net capital gains in the foreseeable future[552]

Financial Results - The company's net investment income for the quarter ended June 30, 2025, was $0.39 per share, an increase from $0.37 per share for the quarter ended March 31, 2025 [1][7] - The net asset value (NAV) per share decreased to $14.75 as of June 30, 2025, down from $14.93 as of March 31, 2025, representing a decline of 1.2% [1][7] - Total assets increased to $3.46 billion as of June 30, 2025, compared to $3.36 billion as of March 31, 2025 [6] Investment Activity - New investment commitments during the quarter totaled $262 million, with gross fundings (excluding revolver fundings) amounting to $254 million [7] - The company reported net fundings of $144 million for the quarter, with direct origination revolver fundings totaling $35 million and repayments totaling $28 million [4][7] - The company expects to receive a net repayment of approximately $90 million from Merx Aviation Finance, LLC, which will reduce its exposure to Merx to about 2.8% of the total portfolio at fair value [3][7] Dividend Declaration - On August 5, 2025, the Board declared a dividend of $0.38 per share, payable on September 25, 2025, to stockholders of record as of September 9, 2025 [2][7] Debt and Leverage - The company's net leverage ratio was reported at 1.44x as of June 30, 2025, compared to 1.31x as of March 31, 2025 [8] - Outstanding debt obligations totaled $2.05 billion as of June 30, 2025, with a debt-to-equity ratio of 1.49x [8][15] Portfolio Composition - As of June 30, 2025, the portfolio composition included 93% first lien secured debt and 1% common equity/interests and warrants [17][18] - The weighted average yield on the total portfolio was reported at 9.2% [18] Management Changes - The company appointed Kenneth Seifert as Chief Financial Officer and Treasurer, effective June 30, 2025 [7]

Group 1 - The article focuses on low-duration, high-yield investments, specifically highlighting MidCap Financial Investment Corporation (NASDAQ: MFIC) as a popular Business Development Company (BDC) in the industry [1] - The investing group Trade With Beta, led by Denislav, offers features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, hedging strategies, and an actively managed portfolio [1] - The article emphasizes the importance of active investor participation and provides a platform for discussion among sophisticated traders and investors [1]

Company Overview - MidCap Financial Investment Corporation (NASDAQ: MFIC) is a closed-end, externally managed, diversified management investment company that operates as a business development company (BDC) under the Investment Company Act of 1940 [3] - The company is externally managed by Apollo Investment Management, L.P., an affiliate of Apollo Global Management, Inc., focusing on generating current income and long-term capital appreciation [3] - MidCap primarily invests in first lien senior secured loans to privately held U.S. middle-market companies, defined as those with less than $75 million in EBITDA [3] Upcoming Financial Reporting - The company will report its results for the quarter ended June 30, 2025, after the market closes on August 11, 2025 [1] - A conference call will be held on August 12, 2025, at 8:30 a.m. Eastern Time, with participation details provided for interested parties [2]

Group 1 - MidCap Financial (NASDAQ: MFIC) reported first-quarter results that were in line with other business development corporations (BDCs) such as Ares Capital (ARCC), but the results were considered weak [1] - The earnings reported by MidCap Financial appear weak when compared to similar earnings at current Federal Reserve interest rates [1]

Financial Data and Key Metrics Changes - The company reported net investment income of $37 million for the quarter, corresponding to an annualized return on equity (ROE) of 9.8% [6] - GAAP net income per share was $0.32, reflecting an annualized ROE of 8.7% [6] - NAV per share decreased to $14.93, down $0.05 or approximately 30 basis points [6] - Total investment income for the quarter was approximately $78.7 million, down $3.5 million or 4.2% compared to the prior quarter [36] - Net investment income per share was $0.37, with a net loss of approximately $4 million or $0.05 per share [40][41] Business Line Data and Key Metrics Changes - The portfolio had a fair value of $3.19 billion, invested in 240 companies across 49 different industries [23] - Direct origination and other represented 92% of the total portfolio, up from 90% in the previous quarter [23] - The weighted average yield at cost of the direct origination portfolio was 10.7%, down from 11% in the previous quarter [25] - The weighted average net leverage on new commitments was 4.2x, down from 4.3x in the prior quarter [21] Market Data and Key Metrics Changes - The company made $376 million of new commitments during the quarter, with a weighted average spread of 513 basis points across 33 different companies [20] - The non-direct origination assets onboarded from mergers represented just 2% of the total portfolio at fair value [9] - MidCap Financial closed approximately $6.5 billion of commitments during the quarter, despite muted sponsor M&A activity [10] Company Strategy and Development Direction - The company focuses on building a diversified portfolio of first lien floating rate direct corporate loans in less cyclical industries [7][26] - The management believes the core middle market offers attractive opportunities across cycles and does not compete directly with the broadly syndicated market or the high yield market [11] - The company is actively deploying capital from mergers and has a robust pipeline for future investments [22] Management's Comments on Operating Environment and Future Outlook - Management noted that the current uncertainty stemming from trade tariffs could pose challenges, but the impact is expected to be limited [8] - The company is monitoring the speed of confidence restoration among consumers and corporates, which is crucial for economic recovery [16] - Management expressed confidence in the portfolio's stability, with no signs of general credit weakness observed [30] Other Important Information - The company declared a quarterly dividend of $0.38 per share, payable on June 26, 2025 [19] - The company repurchased approximately 477,000 shares at a weighted average price of $12.75, which had an accretive impact on NAV per share [42] Q&A Session Summary Question: Can you discuss the strong fundings in Q2 despite cautious commentary? - Management indicated that strong deployment in Q1 was a result of activity that commenced earlier, and they expect fewer auctions in the latter half of the year [47] Question: What is the sustainability of the dividend relative to NII? - Management expressed comfort in their earnings power and capital plan, noting that prepayment income can fluctuate [50] Question: How dependent is MFIC on M&A activity for new originations? - Management clarified that MFIC is not completely reliant on M&A activity, as there are existing portfolios and opportunities for growth [55] Question: What is the exposure to government contracts in the portfolio? - Management stated that they have limited exposure to government payments and have always assessed such risks in their underwriting [70] Question: What is the meaningful exposure to tariff-affected countries? - Management indicated that the exposure is in single digits and emphasized their focus on U.S. companies with less complex supply chains [74] Question: What are the trends in amendment activity? - Management noted that amendment activity was relatively flat quarter over quarter, with no significant changes observed [77]