NEW YORK, May 7, 2025 /PRNewswire/ -- Blue Owl Capital Corporation (NYSE: OBDC) ("OBDC" or the "Company") today announced financial results for its first quarter ended March 31, 2025.FIRST QUARTER 2025 HIGHLIGHTS  First quarter GAAP net investment income ("NII") per share of $0.41 First quarter adjusted NII per share of $0.39, as compared with $0.47 as of December 31, 2024 Based on OBDC's supplemental dividend framework, the Board of Directors (the "Board") declared a first quarter supplemental dividend of ...

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]

Core Viewpoint - Blue Owl Capital Corporation is expected to report its first-quarter 2025 results on May 7, 2025, with earnings estimated at 43 cents per share and revenues at $452.9 million, indicating a year-over-year earnings decline of 8.5% but a revenue growth of 13.3% [1] Financial Performance Estimates - The Zacks Consensus Estimate for Blue Owl Capital's revenues for 2025 is $1.9 billion, reflecting a year-over-year increase of 17.1% [2] - The consensus estimate for the current year's EPS is $1.70, suggesting a decline of approximately 10.5% year-over-year [2] - The company has beaten the consensus estimate in one of the last four quarters, met once, and missed twice, with an average surprise of negative 0.5% [2] Earnings Prediction - The model predicts a likely earnings beat for Blue Owl Capital, supported by a positive Earnings ESP of +2.33% and a Zacks Rank of 3 (Hold) [3] Q1 Results Influencers - The estimated net investment income for Q1 indicates a 9.5% year-over-year decline, with expected elevated net operating expenses around $250 million due to higher interest expenses and management fees [5] - Dividend income is anticipated to increase, with the Zacks Consensus Estimate for controlled affiliated dividend income showing a 1.5% year-over-year rise, while the model predicts a 2.9% growth [6][7] - Non-controlled non-affiliated interest income is expected to grow by 4.9% year-over-year according to the Zacks Consensus Estimate, with the model estimating a 3.8% increase [7] Investment Portfolio Insights - Blue Owl Capital's investment portfolio is projected to grow, driven by strong demand for financing solutions, with both the Zacks Consensus Estimate and model estimates indicating a 1.8% increase in controlled affiliated interest income compared to the same quarter last year [8] - The Zacks Consensus Estimate for payment-in-kind interest income from non-controlled, non-affiliated investments suggests a significant year-over-year growth of 15.7%, which may help offset some negatives [9] - The expected supplemental dividend per share is projected to be 3 cents [9]

Core Insights - The article emphasizes the importance of a diversified investment strategy that combines classic dividend growth stocks with other asset classes such as Business Development Companies, REITs, and Closed End Funds to enhance income while achieving total returns comparable to traditional index funds [1]. Investment Strategy - The author advocates for a hybrid investment approach that balances growth and income, suggesting that this method can effectively boost investment income while maintaining a total return aligned with the S&P 500 [1]. Personal Experience - The author shares personal investment experiences, highlighting a journey from traditional index fund investing to a more nuanced strategy that includes high-quality dividend stocks and other income-generating assets [1].

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The current market environment shows significant volatility, with the Dow Jones Industrial Index experiencing swings of over 500 points [2] - The emphasis is on defensive stocks with a medium- to long-term investment horizon [2]

Core Viewpoint - Blue Owl Capital Corporation (OBDC) will release its financial results for the first quarter ended March 31, 2025, on May 7, 2025, after market close, followed by a conference call on May 8, 2025, at 10:00 a.m. Eastern Time to discuss these results [1]. Company Information - Blue Owl Capital Corporation is a specialty finance company focused on lending to U.S. middle-market companies and is regulated as a business development company under the Investment Company Act of 1940 [3]. - OBDC is externally managed by Blue Owl Credit Advisors LLC, which is an SEC-registered investment adviser and an indirect affiliate of Blue Owl Capital Inc. [3].

Company Overview - Skylight has secured a $50 million loan through an expanded partnership with SG Credit Partners and Wingspire Capital, supporting its mission to meet the growing demand for its technology for families [1][4] - The company has achieved 99% year-over-year revenue growth, indicating strong market performance and demand for its products [1] Financial Details - The financing will fund inventory purchases, enabling Skylight to scale with consumer demand while continuing to innovate [3] - SG Credit Partners increased its commitment from a previous $20 million facility to $50 million, highlighting confidence in Skylight's growth trajectory [4] Product and Market Position - Skylight connects over 9.3 million users and focuses on simplifying household management through innovative products like the Skylight Calendar and Skylight Frame [6][7] - The company is addressing the mental load of household management, which consumes over 30 hours weekly, by developing solutions that help families stay connected [3] Strategic Partnerships - The partnership with Wingspire Capital is aimed at providing additional liquidity to support Skylight's strategic growth plans [5] - Both SG Credit Partners and Wingspire Capital have a track record of backing innovative consumer brands, reinforcing Skylight's position in the market [4][5]

Financial Data and Key Metrics Changes - The fourth quarter net investment income (NII) was $0.47 per share, with a full year NII totaling $1.89 per share [9][36] - Return on equity (ROE) for the quarter was 12.4%, marking the eighth consecutive quarter of double-digit ROE, while the full year ROE was 12.2% [10] - The net asset value (NAV) per share at quarter-end was $15.26, approximately in line with the prior quarter [10][36] - Record dividends paid out in 2024 totaled $1.72 per share, reflecting a nearly 10% increase year over year [11] Business Line Data and Key Metrics Changes - The company originated a record number of investments in 2024, committing over $27 billion in direct originations, which was roughly double from 2023 [23] - In the fourth quarter, approximately $1.2 billion in new investment commitments were deployed, with over 97% consisting of first lien investments [24] - First lien investments increased from 68% to 76% of the portfolio, and combined with OBDE's portfolio, increased to 78% pro forma [25] Market Data and Key Metrics Changes - The non-accrual rate remained low at 40 basis points of the portfolio at fair value, decreasing to 30 basis points when combined with OBDE's portfolio [31] - The average loan-to-value (LTV) ratio of the portfolio was 44%, with a median EBITDA of portfolio borrowers at $119 million [26] Company Strategy and Development Direction - The merger with OBDE has positioned the company as the second-largest publicly traded BDC by total assets, enhancing competitive advantages and trading liquidity [20][21] - The company aims to optimize its portfolio and asset mix to improve yield, potentially increasing investments in strategic equity and joint ventures [49] - The strategic focus includes expanding into alternative and investment-grade credit as well as data centers, broadening the credit platform [15][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the portfolio despite economic pressures, with borrower revenues and EBITDA continuing to grow in the mid to high single digits year over year [27][34] - The company anticipates supportive market conditions in 2025, which may drive a potential pickup in M&A activity [46] - Management noted that while headwinds from lower rates and spreads are expected, the scale and presence of the credit platform will allow continued attractive returns [58][59] Other Important Information - The company has established a joint venture across all BDCs to create a more efficient investment structure [43] - Following the merger, the company plans to file a $750 million market equity issuance program to raise capital under supportive market conditions [42] Q&A Session Summary Question: What can Blue Owl Capital Corporation deliver in terms of ROEs in 2025 and beyond? - Management indicated that ROE could be in the range of 10% to 11% due to lower rates and spreads, but expects to offset some of this reduction through cost savings and portfolio optimization from the merger [56][58] Question: How far along is the portfolio in recognizing Fed rate cuts? - The portfolio is approximately 70% through recognizing the resets from the Fed rate cuts [71] Question: What proportion of the portfolio is still above market spreads? - About 10% to 15% of the portfolio could still be at risk of opportunistic refinancing with lower spreads [84] Question: Can you elaborate on the strategic equity investments? - Strategic equity investments are in specialized lending strategies, and while there are no immediate plans for new investments, the company remains open to opportunities that align with its high standards [92] Question: How does the company plan to utilize the ATM program? - The ATM program will be used to issue equity above book value, ensuring it is accretive and beneficial for shareholders [126][130]