Financial Data and Key Metrics Changes - The company reported total portfolio investments of nearly $18 billion, total net assets of nearly $8 billion, and total outstanding debt of approximately $10 billion [17] - The first quarter NAV per share was $15.14, down $0.12 from the last quarter, primarily due to changes in credit spreads and write-downs on a small number of high-focus investments [17] - Adjusted net investment income was $0.39 per share, down $0.08 from the prior quarter, reflecting a reduction in one-time income [17][18] - The company declared a supplemental dividend of $0.01 and a second quarter base dividend of $0.37, indicating a 106% dividend coverage [18][19] Business Line Data and Key Metrics Changes - The company recorded $1.2 billion of new investment commitments and $800 million of fundings in the first quarter, with over 90% of direct loan originations consisting of first lien investments [9][10] - The median EBITDA of portfolio borrowers grew slightly to $120 million, and weighted average EBITDA increased to $215 million [10] - The non-accrual rate was 0.8% at fair value and 1.4% at cost, compared to 0.4% and 1.9% in the prior quarter, reflecting two additions and the removal of three positions [12] Market Data and Key Metrics Changes - The company noted that portfolio company revenues and EBITDA increased in the mid to high single digits year over year, approximately double the U.S. GDP growth rate [11] - The average loan-to-value (LTV) ratio was just over 40%, providing significant support underneath the capital [11] - The company highlighted a stable interest coverage ratio of 1.8 times based on current spot rates, benefiting from lower rates [13] Company Strategy and Development Direction - The company aims to capitalize on market volatility by providing support to borrowers and sponsors facing challenges in accessing financing [23][25] - The strategy remains focused on credit quality, with an emphasis on upper middle market companies and diversified portfolios [84] - The company is exploring opportunities to increase exposure to non-traditional lending strategies, aiming to grow this segment from low double digits to around 15% of the portfolio [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience and the ability to maintain dividend levels despite macroeconomic uncertainties [26] - The company is closely monitoring investments for potential tariff impacts but remains confident in its defensive positioning [14] - Management acknowledged the uncertainty in the M&A environment due to tariffs and indicated that this may continue for a while [32] Other Important Information - The company introduced non-GAAP accounting adjustments due to the merger with OBDE, recognizing an $83 million purchase discount on the assets acquired [15] - The company ended the quarter with over $3 billion of total cash and capacity on its facilities, providing ample liquidity to meet near-term funding needs [21] Q&A Session Summary Question: Perspective on macroeconomic developments and M&A activity - Management noted that the M&A environment remains muted due to uncertainty created by tariffs, impacting deal flow and spreads [30][32] Question: Timeline for public listing of OTF post-merger - Management stated there is nothing specific to disclose regarding the public listing of OTF at this time [39][40] Question: Share repurchase strategy during volatility - Management confirmed that share repurchase programs are regularly evaluated, but recent volatility did not coincide with open windows for repurchases [46][48] Question: Opportunities to rationalize inherited liabilities - Management indicated that there are opportunities to reprice certain dropdown facilities and CLOs inherited from the merger [51][52] Question: Probability of near-term recession and its impact on underwriting - Management acknowledged the need for caution in underwriting due to potential economic changes but noted that their portfolio companies are currently stable [57][58] Question: Operational efficiencies from the merger - Management highlighted ongoing efforts to optimize capital structure and reduce funding costs, with some synergies already realized [72][75] Question: Pipeline mix of new versus incumbent borrowers - Management reported that more than half of the deal flow in the first quarter came from existing borrowers, with a consistent pipeline expected [92][93]

Financial Data and Key Metrics Changes - The company reported total portfolio investments of nearly $18 billion and total net assets of nearly $8 billion, with total outstanding debt of approximately $10 billion [16] - The first quarter NAV per share was $15.14, down $0.12 from the last quarter, primarily due to changes in credit spreads and write-downs on a small number of high-focus investments [16] - Adjusted net investment income was $0.39 per share, down $0.08 from the prior quarter, reflecting a reduction in one-time income [16][17] - The company declared a supplemental dividend of $0.01 and a base dividend of $0.37 for the second quarter, indicating a 106% dividend coverage [18][19] Business Line Data and Key Metrics Changes - New investment commitments totaled $1.2 billion, with fundings of $800 million, excluding joint venture and strategic equity activity [7] - Over 90% of first-quarter direct loan originations were first lien investments, increasing from 73% to 77% of the portfolio over the last year [8][9] - The median EBITDA of portfolio borrowers grew slightly to $120 million, while weighted average EBITDA increased to $215 million [9] - The non-accrual rate was 0.8% at fair value and 1.4% at cost, compared to 0.41% and 0.9% in the prior quarter [11] Market Data and Key Metrics Changes - The company noted a slowdown in M&A activity due to recent policy shifts and uncertainty around tariffs, impacting deal flow [7][32] - The public loan market experienced volatility, but private credit spreads remained stable, with some market participants noting a 25 to 50 basis points widening [34][81] - The company highlighted that the majority of deal flow in the first quarter came from existing borrowers, with more than half being add-ons and refinancings [93] Company Strategy and Development Direction - The company aims to capitalize on market volatility by providing support to borrowers and sponsors facing challenges in accessing financing [23] - The strategy remains focused on credit quality, with an emphasis on upper middle market companies and diversified portfolios [84] - The company is exploring opportunities to rationalize liabilities inherited from the merger to lower costs [50][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience and the ability to maintain dividend levels despite macroeconomic uncertainties [25] - The company is closely monitoring investments for potential tariff impacts but remains confident in its defensive positioning [13] - Management indicated that while macroeconomic uncertainty persists, the market anticipates a significant reduction in interest rates, which will impact earnings [24] Other Important Information - The company ended the quarter with over $3 billion in total cash and capacity on its facilities, providing ample liquidity to meet near-term funding needs [21] - The company has visibility into several large repayments expected in the near term, which will help optimize its capital structure [20] Q&A Session Summary Question: Perspective on macro developments and M&A activity - Management noted that the M&A environment remains muted due to uncertainty around tariffs, impacting deal flow and spreads [32][34] Question: Timeline for public listing of OTF - Management stated there is nothing specific to disclose regarding the public listing of OTF at this time [38][39] Question: Share repurchase strategy - Management confirmed that share repurchase programs are regularly evaluated, but recent volatility did not coincide with open windows for repurchases [44][46] Question: Opportunities in inherited liabilities - Management indicated that there are opportunities to rationalize inherited liabilities at lower costs, with steps already taken to reprice certain facilities [50][72] Question: Probability of near-term recession - Management acknowledged the need for caution in underwriting due to potential economic changes but noted that the portfolio companies are currently not showing signs of economic weakness [56][58] Question: Incremental thoughts on non-traditional lending strategies - Management expressed interest in increasing exposure to diversified lending strategies, aiming to grow this segment over time [62][66] Question: Spillover income and dividend sustainability - Management clarified that spillover income is intended to sustain dividends during periods of volatility but will not be used to cover long-term income shortfalls [88][89] Question: Pipeline mix of new versus incumbent borrowers - Management reported that more than half of the deal flow in the first quarter came from existing borrowers, with a consistent pipeline expected for the second quarter [93][95]

Group 1 - Blue Owl Capital Corporation (NYSE: OBDC) is the second-largest publicly traded Business Development Company (BDC) [1] - The company is expected to release its first quarter results soon, amidst recent market volatility [1] - Investments known for their dividends and income are highlighted as a strategy for strong total returns in the current market environment [1] Group 2 - The analysis approach focuses on value investing, an owner's mindset, and a long-term investment horizon [1] - The author does not engage in writing sell articles or recommending shorting stocks [1]

Core Insights - Blue Owl Capital Corporation reported revenue of $464.65 million for Q1 2025, a year-over-year increase of 16.3% [1] - The company's EPS for the same period was $0.39, down from $0.47 a year ago, indicating a decline [1] - Revenue exceeded the Zacks Consensus Estimate of $452.85 million by 2.61%, while EPS fell short of the consensus estimate of $0.43 by 9.30% [1] Financial Performance Metrics - Investment income from non-controlled, non-affiliated investments showed significant growth, with interest income at $356.46 million, surpassing the estimated $303.80 million, reflecting a 21.1% increase year-over-year [4] - Other income from non-controlled, non-affiliated investments was reported at $5.59 million, slightly below the estimated $6.06 million, marking a 5.2% increase year-over-year [4] - Dividend income from controlled, affiliated investments reached $35.01 million, exceeding the estimated $29.21 million, representing a 21.6% year-over-year increase [4] - Total investment income from non-controlled, non-affiliated investments was $418.98 million, surpassing the average estimate of $380 million [4] - Total investment income from controlled, affiliated investments was reported at $43.98 million, exceeding the average estimate of $37.80 million [4] Stock Performance - Over the past month, shares of Blue Owl Capital Corporation returned +9.9%, compared to the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Blue Owl Capital Corporation reported quarterly earnings of $0.39 per share, missing the Zacks Consensus Estimate of $0.43 per share, and down from $0.47 per share a year ago, representing an earnings surprise of -9.30% [1] - The company posted revenues of $464.65 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.61%, and up from $399.58 million year-over-year [2] - Over the last four quarters, Blue Owl Capital Corporation has surpassed consensus revenue estimates three times, but has only exceeded EPS estimates once [2] 分组2 - The stock has underperformed the market, losing about 9.3% since the beginning of the year compared to the S&P 500's decline of -4.7% [3] - The current consensus EPS estimate for the coming quarter is $0.43 on revenues of $472.21 million, and for the current fiscal year, it is $1.70 on revenues of $1.87 billion [7] - The Zacks Industry Rank for Financial - Miscellaneous Services is in the bottom 43% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]

Financial Results Announcement - Blue Owl Capital Corporation will release its financial results for Q1 2025 on May 7, 2025, after market close[3] - The press release regarding the financial results is attached as Exhibit 99.1 to the Form 8-K[5] Earnings Call - The earnings webcast/conference call is scheduled for May 8, 2025, at 10:00 a.m. Eastern Time[3]

Core Insights - Blue Owl Capital Corporation reported a solid start to 2025 with a 10.2% annualized return on equity, supported by a resilient portfolio and the recent merger with OBDE, making it the second largest externally managed publicly traded BDC by total assets, exceeding $18 billion as of March 31, 2025 [3][5][23]. Financial Highlights - The company declared a second quarter 2025 regular dividend of $0.37 per share and a supplemental dividend of $0.01 per share for the first quarter 2025 [4][7]. - For the first quarter ended March 31, 2025, net investment income per share was $0.41, down from $0.47 in the previous quarter, while adjusted net investment income per share was $0.39 [6][27]. - Total investments at fair value increased to $17.7 billion from $13.2 billion in the previous quarter, with total assets reaching $18.4 billion [6][25]. Portfolio Composition - As of March 31, 2025, the company had investments in 236 portfolio companies across 30 industries, with an average investment size of $75 million [9][23]. - The portfolio consisted of 77.5% first-lien senior secured debt investments, 5.0% second-lien senior secured debt investments, and 10.2% common equity investments [10][11]. Investment Activity - New investment commitments for the first quarter totaled $1.2 billion, with $913 million funded, compared to $1.7 billion in new commitments and $1.6 billion funded in the previous quarter [11][12]. - The company experienced a decrease in investments on non-accrual, which represented 0.8% of the portfolio at fair value, up from 0.4% in the previous quarter [7][11]. Results of Operations - Investment income increased to $464.6 million for the first quarter, up from $394.4 million in the previous quarter, primarily due to higher interest income from the merger [17][30]. - Total expenses rose to $259.6 million, driven by increased interest expense and management fees related to the merger [18][30]. Liquidity and Capital Resources - As of March 31, 2025, the company had $514.2 million in cash and restricted cash, with total debt outstanding of $10.2 billion, maintaining a balanced funding mix of 50% secured and 50% unsecured borrowings [19][28].

Investment Overview - As of March 31, 2025, Blue Owl Capital Corporation's Adviser and its affiliates have originated an aggregate principal amount of investments totaling $154.20 billion, with $150.22 billion retained by the company or its advised funds [524]. - The company targets middle-market companies with EBITDA between $10 million and $250 million annually and/or annual revenue of $50 million to $2.5 billion at the time of investment [525]. - The company focuses on investing in non-cyclical industries, particularly in healthcare, business services, financial services, and software [557]. - The portfolio consists of 77.5% first lien senior secured debt investments, with 52% classified as unitranche debt investments [552]. - The company aims to participate in transactions sponsored by high-quality private equity and venture capital firms capable of providing operational and financial resources [524]. Financial Performance - The total investment income was $464.6 million, an increase of 16.3% from $399.6 million in the same period of 2024 [588]. - The net investment income after taxes for the three months ended March 31, 2025, was $201.3 million, compared to $182.8 million in 2024, reflecting a growth of 10.3% [588]. - Investment income increased to $464.6 million for the three months ended March 31, 2025, up from $399.6 million in the same period of 2024, primarily due to increased interest income from debt investments [593]. - Total operating expenses rose to $259.6 million in Q1 2025 from $211.6 million in Q1 2024, driven by higher interest expense, management fees, and incentive fees [595]. - Interest expense increased to $148.5 million in Q1 2025 from $119.1 million in Q1 2024, attributed to an increase in average borrowings from $7.5 billion to $10.2 billion [597]. Investment Strategy - The company expects to generate current income primarily through direct originations of senior secured loans and other debt investments in U.S. middle-market companies [524]. - The average debt investment size in each portfolio company was approximately $70.0 million based on fair value, with portfolio companies representing 93.7% of the total debt portfolio having a weighted average annual revenue of $938 million and a weighted average annual EBITDA of $215 million [529]. - The company focuses on originating loans to middle-market companies and may reduce investment levels through partial sales or syndication to additional lenders [532]. - The average hold size of new investments in Blue Owl's direct lending strategy increased to approximately $350 million in 2025, up from $200 million in 2021 [559]. Debt and Leverage - The current target leverage ratio is 0.90x-1.25x, with net leverage reported at 1.26x debt-to-equity [555]. - The total debt as of March 31, 2025, was $13,014.6 million, with an outstanding principal of $10,285.5 million [637]. - The average interest rate for the three months ended March 31, 2025, was 5.6%, with total interest expense amounting to $148.5 million [640]. - The company has a requirement to invest at least 70% of its assets in "qualifying assets" as defined in the Investment Company Act of 1940 [523]. Market Conditions - The lending environment is challenging, with merger and acquisition activity below historical levels and refinance activity slowed [556]. - The middle-market lending environment is viewed as providing opportunities for attractive risk-adjusted returns [543]. - The company expects earnings to benefit from a prolonged higher interest rate environment due to its floating rate loan portfolio [535]. Investment Commitments - Total new investment commitments for the three months ended March 31, 2025, were $1,158,874,000, compared to $1,202,698,000 in 2024 [563]. - The principal amount of new investments funded in the first quarter of 2025 was $912,859,000, slightly down from $920,370,000 in the same period of 2024 [563]. - The weighted average interest rate of new debt investment commitments was 9.5% for the three months ended March 31, 2025, down from 11.1% in 2024 [563]. Shareholder Returns - For the three months ended March 31, 2025, the company declared a distribution of $0.37 per share and a supplemental dividend of $0.05 per share [628]. - The company generated undistributed taxable earnings "spillover" of approximately $0.34 per share as of March 31, 2025 [598]. - Dividend income increased to $56.5 million in Q1 2025 from $50.1 million in Q1 2024, mainly due to higher dividends from equity investments acquired from OBDE [593]. Asset Management - The company has been granted an order for exemptive relief by the SEC to co-invest with other funds managed by its Adviser or certain affiliates, subject to various approvals [519]. - The company is regulated as a Business Development Company (BDC) under the Investment Company Act of 1940 and as a regulated investment company (RIC) for tax purposes [522]. - The weighted average total yield of the portfolio was 10.2% at fair value and 10.3% at amortized cost [554]. - The weighted average spread of total debt investments was 6.1% as of March 31, 2025 [554]. Portfolio Quality - The portfolio composition as of March 31, 2025, included 85.2% rated 2, 7.7% rated 3, and 0.1% rated 5, indicating a stable risk profile [579]. - The amortized cost of performing debt investments was $14,821.5 million, representing 98.4% of total debt investments as of March 31, 2025 [579]. - The company had only four portfolio companies on non-accrual status as of March 31, 2025, with a non-accrual ratio of 1.6% [578]. - The net change in unrealized gain for the three months ended March 31, 2025, was $194.9 million, a significant increase from $6.6 million in 2024 [588]. Mergers and Acquisitions - The company completed a merger on January 13, 2025, resulting in a purchase discount that will amortize over the life of the acquired loans [589]. - The company acquired investments totaling $4.15 billion from OBDE on January 13, 2025, which included 189 portfolio companies [565].

Blue Owl Capital Corporation (NYSE: OBDC ) is a much more interesting pick to me than many investors claim. It's a relatively large player with an interesting portfolio structure, a focus on middle-market businesses which tend to be more resilient, and manageable non-accruals.Welcome to Cash Flow Venue, where dividends do the heavy lifting! Blending my financial chops with the timeless wisdom of value investing (and love for steady income), I’ve built a rock-solid pillar in my financial foundation through d ...

Core Insights - Wall Street analysts forecast Blue Owl Capital Corporation (OBDC) will report quarterly earnings of $0.43 per share, reflecting a year-over-year decline of 8.5%, while revenues are expected to reach $452.85 million, indicating a 13.3% increase compared to the previous year [1] Earnings Estimates - The consensus EPS estimate has been revised downward by 0.4% in the past 30 days, indicating a reassessment by covering analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong relationship between earnings estimate revisions and short-term stock price performance [3] Key Metrics Projections - Analysts project 'Investment income from non-controlled, non-affiliated investments - Interest income' to be $303.80 million, reflecting a year-over-year increase of 3.2% [5] - The estimated 'Investment income from non-controlled, non-affiliated investments - Other income' is $6.06 million, indicating a year-over-year change of 14.1% [5] - The average prediction for 'Investment income from controlled, affiliated investments - Dividend income' is $29.21 million, showing a change of 1.5% from the prior year [6] - Analysts expect 'Investment income from non-controlled, non-affiliated investments - Dividend income' to reach $22.44 million, reflecting a 5.2% increase from the previous year [6] - 'Investment income from controlled, affiliated investments - Interest income' is expected to be $7.82 million, indicating a year-over-year decline of 2.2% [7] - The consensus for 'Investment income from non-controlled, non-affiliated investments - Payment-in-kind interest income' is $47.70 million, reflecting a year-over-year increase of 15.7% [7] Stock Performance - Shares of Blue Owl Capital Corporation have increased by 7.9% in the past month, compared to a 11.5% increase in the Zacks S&P 500 composite [7] - With a Zacks Rank 4 (Sell), OBDC is expected to underperform the overall market in the near future [7]