Core Insights - Runway Growth Capital LLC has committed $20 million to Swing Education to support its nationwide expansion and address the demand for qualified substitute teachers [1][3] - Swing Education, founded in 2015, operates as an online marketplace connecting schools with substitute teachers, addressing the acute shortage in K–12 education [2][5] - The investment from Runway is structured as a first lien term loan and a revolving credit line, providing Swing Education with flexible financing to meet seasonal capital needs [1][3] Company Overview - Swing Education partners with school districts across multiple states including California, Arizona, Texas, Illinois, New York, New Jersey, and Washington, D.C. [2][5] - The company aims to streamline the hiring and placement of substitute teachers through technology and support services, improving the overall experience for schools and educators [2][5] - Swing Education has filled millions of absence days and is dedicated to ensuring every classroom has a teacher, thereby enhancing student learning opportunities [5] Investment Context - Runway Growth Capital focuses on providing growth loans to companies seeking alternatives to equity financing, with a target loan size ranging from $20 million to $150 million [4] - The investment reflects Runway's commitment to supporting growth-stage companies with non-dilutive capital that aligns with their long-term strategic goals [3]

Core Points - Runway Growth Finance Corp. declared total distributions for Q3 2025 of $0.36 per share, consisting of a regular cash dividend of $0.33 and a supplemental dividend of $0.03 [1] - The key dates for the Q3 2025 dividend include the declaration date on August 6, 2025, record date on August 18, 2025, and payment date on September 2, 2025 [2] - Runway Growth aims to distribute substantially all of its available earnings on a quarterly basis, subject to the discretion of its Board of Directors [2] - The company operates as a closed-end investment fund regulated as a business development company under the Investment Company Act of 1940 [3] - Runway Growth is externally managed by Runway Growth Capital LLC, led by industry veteran David Spreng [3]

Core Insights - Runway Growth Finance Corp. (RWAY) is expected to report second-quarter 2025 results on August 7, with anticipated revenue decline and earnings increase year-over-year [1][8] - The company has a weak earnings surprise history, lagging the Zacks Consensus Estimate in three of the last four quarters [2] Earnings & Sales Projections - The Zacks Consensus Estimate for RWAY's earnings is 39 cents, reflecting a 5.4% increase from the prior-year quarter [3] - The consensus estimate for sales is $34 million, indicating a slight decline [3] Factors Impacting Earnings - The Federal Reserve's decision to keep interest rates unchanged at 4.25-4.5% during Q2 2025 likely benefited RWAY's interest income due to higher loan yields [4] - RWAY has been experiencing rising expenses due to investments in venture growth stage companies, which are expected to have elevated operating costs in the second quarter [4] Earnings Whispers - The quantitative model does not predict an earnings beat for RWAY, as it lacks a positive Earnings ESP and a Zacks Rank better than 3 [5] - RWAY currently holds a Zacks Rank of 3 [6] Performance of Other Finance Stocks - Moody's reported adjusted earnings of $3.56 per share, exceeding the Zacks Consensus Estimate of $3.44, with an 8.5% year-over-year growth [7] - Moelis & Company reported adjusted earnings of 53 cents per share, significantly improving from 18 cents in the prior-year quarter, supported by revenue growth despite increased expenses [9]

Financial Data and Key Metrics Changes - Revenues increased by 2%, up from 1.7% in the first quarter, driven by media distribution and digital infrastructure, with CPI contributing 1.2% [3][4] - Adjusted EBITDA reached €96.3 million, a 3% increase, with net profitability consistent with last year [4][14] - Net debt stood at €178 million, approximately one times the last twelve months EBITDA, reflecting a €50 million increase since the end of 2024 [21][22] Business Line Data and Key Metrics Changes - Media distribution revenues grew by 10.8%, significantly above CPI, due to the coverage extension of the Ride app network [16][17] - Digital infrastructure segment revenues amounted to €16.4 million, growing by 3.6%, primarily from tower hosting, with radio broadcaster volumes increasing by 50% [18] Market Data and Key Metrics Changes - The CDN market is stabilizing with balanced supply and demand, leading to decreased competition and improved performance quality [7][8] - The company is focusing on mid-sized enterprises and digital players, anticipating over 30 megawatts of additional demand in the coming years [10] Company Strategy and Development Direction - The company plans to expand its service range and partnerships, particularly with private cloud players, while focusing on the hyperscale project [12][13] - Maintenance CapEx is expected to increase due to extraordinary activities, while development CapEx is anticipated to be lower than last year [23][24] Management Comments on Operating Environment and Future Outlook - Management raised the adjusted EBITDA guidance for 2025, citing favorable electricity tariffs and higher non-core benefits [22][23] - The company is actively targeting non-core benefits to maintain growth levels despite development initiative impacts [23] Other Important Information - The company is undergoing extraordinary maintenance activities, including significant investments in the Apulia region [5][6] - Framework agreements with major operators for live streaming in Italy are expected to enhance traffic and revenue [9] Q&A Session Questions and Answers Question: Details on potential sector consolidation and expected timeline - Management indicated that the consolidation process is complex, with ongoing evaluations and no specific timeline available at this stage [28][29] Question: Next steps for hyperscale data center project - The concession with the municipality is expected to be signed in the coming weeks, with pre-marketing activities to follow [30][31] Question: Clarification on EBITDA guidance and non-core benefits - The €1.5 million non-core benefits were already included in the guidance, with additional impacts noted in operating expenses [37] Question: Revenue breakdown for CDN and edge data center - Management expects a roughly equal split between CDN and edge data center revenues, with a slight preference for CDN [38] Question: Investment levels for maintenance and development CapEx - Maintenance CapEx is expected to trend upwards, while development CapEx is projected to decrease by 20-25% compared to last year [49]

Core Insights - Runway Growth Finance Corp. completed three investments totaling $37.8 million in funded loans during the second quarter of 2025, focusing on portfolio optimization and diversification [1][2][3] Investment Activities - The company funded two new portfolio companies and one existing portfolio company, including a $10 million investment in Federal Hearings and Appeals Services (FHAS) [3][7] - Additional investments included $40 million in Autobooks, $20 million in Swing Education, and $2.8 million in Marley Spoon SE [7] Liquidity Events - Runway Growth received a full principal repayment of $21.1 million from Nalu Medical Inc. and a repayment of $25 million from SetPoint Medical Corporation during the second quarter [4][8] Portfolio Management - As of June 30, 2025, the portfolio consisted of 48 debt investments across 31 companies and 89 equity investments in 49 companies, with a focus on technology, healthcare, and select consumer sectors [6][5] - The company emphasizes a credit-first approach, maintaining rigorous underwriting standards and frequent communication with portfolio companies [5][6] Company Overview - Runway Growth is a specialty finance company providing flexible capital solutions to late- and growth-stage companies, regulated as a business development company under the Investment Company Act of 1940 [9]

Core Viewpoint - Runway Growth Finance Corp. will release its second quarter 2025 financial results on August 7, 2025, and will hold a conference call to discuss these results [1]. Company Overview - Runway Growth is a specialty finance company that provides flexible capital solutions to late- and growth-stage companies as an alternative to raising equity [3]. - The company is structured as a closed-end investment fund and is regulated as a business development company under the Investment Company Act of 1940 [3]. - Runway Growth is externally managed by Runway Growth Capital LLC, which was established in 2015 and is led by industry veteran David Spreng [3]. Conference Call Details - Participants can register for the conference call online at the Runway Growth Investor Relations website, with a recommendation to register a day in advance or at least 15 minutes before the call [2]. - The earnings call is scheduled for 2:00 p.m. PT (5:00 p.m. ET) on August 7, 2025, and a replay of the webcast will be available two hours after the call for 90 days [2].

Core Viewpoint - Runway Growth Finance Corp. (RWAY) shows an attractive investment opportunity due to a significant improvement in its earnings outlook, with analysts raising their earnings estimates [1][3]. Earnings Estimate Revisions - The upward trend in earnings estimate revisions indicates growing analyst optimism regarding the company's earnings prospects, which is expected to positively impact its stock price [2]. - The current-quarter earnings estimate is $0.40 per share, reflecting an increase of +8.11% from the previous year, with a 9.17% rise in the Zacks Consensus Estimate over the last 30 days due to three upward revisions [7]. - For the full year, the expected earnings are $1.58 per share, showing a year-over-year decline of -3.66%, although there has been a 7.04% increase in the consensus estimate due to four upward revisions [8][9]. Zacks Rank and Performance - Runway Growth Finance Corp. currently holds a Zacks Rank 2 (Buy), supported by favorable estimate revisions, which historically correlate with strong stock performance [10]. - Stocks rated Zacks Rank 1 (Strong Buy) and 2 (Buy) have been shown to significantly outperform the S&P 500 [10]. Recent Stock Performance - The company's shares have increased by 6.2% over the past four weeks, indicating investor confidence in its earnings growth prospects [11].

Group 1 - Runway Growth Finance Corp. reported quarterly earnings of $0.42 per share, exceeding the Zacks Consensus Estimate of $0.36 per share, but down from $0.46 per share a year ago, representing an earnings surprise of 16.67% [1] - The company posted revenues of $35.4 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.84%, but down from $40.01 million year-over-year [2] - The stock has underperformed the market, losing about 16.8% since the beginning of the year compared to the S&P 500's decline of 3.8% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.36 on revenues of $33.2 million, and for the current fiscal year, it is $1.48 on revenues of $133.52 million [7] - The Financial - SBIC & Commercial Industry is currently ranked in the bottom 37% of over 250 Zacks industries, indicating a challenging outlook for the sector [8]

Financial Data and Key Metrics Changes - Runway Growth Finance reported total investment income of $35.4 million and net investment income of $15.6 million for Q1 2025, compared to $33.8 million and $14.6 million in Q4 2024, respectively [5][18] - The net asset value (NAV) per share decreased by 2.2% to $13.48 from $13.79 at the end of Q4 2024 [17] - The total investment portfolio's fair value decreased by 6.7% from $1.08 billion in Q4 2024 to $1 billion in Q1 2025 [17] Business Line Data and Key Metrics Changes - The weighted average portfolio risk rating remained stable at 2.33, indicating consistent credit quality [16] - The loan portfolio is primarily composed of first lien senior secured loans, with 97% of assets being floating rate [17][18] - The dollar weighted loan to value ratio increased from 28% to 29.1% [17] Market Data and Key Metrics Changes - The venture capital landscape has shifted, with a slowdown in fundraising and a focus on profitability over growth, impacting deal activity [11][12] - The company noted that healthcare lending has been softer, reflecting broader market caution [26][28] Company Strategy and Development Direction - The company aims to optimize its portfolio and expand origination channels following its merger with BC Partners [6][9] - A strategic focus on credit-first underwriting practices is intended to ensure long-term shareholder value [8] - The company is positioned to benefit from a diversified portfolio that mitigates risk [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate ongoing market volatility and emphasized a focus on sustainable growth [12][61] - The sentiment in the venture ecosystem is shifting, with companies needing to demonstrate growth to attract investment [12][13] Other Important Information - The company has a new stock repurchase program approved for $25 million, reflecting management's belief in the stock's undervaluation [22] - A regular distribution of $0.33 per share and a supplemental dividend of $0.02 per share were declared for Q2 2025 [22] Q&A Session Summary Question: Comments on healthcare lending and its slowdown - Management noted that healthcare remains a core focus, but the current quarter has shown a softer lending environment [26][28] Question: Update on the investment pipeline - The pipeline is currently seeing a high percentage of refinances, with ongoing cautiousness in credit approaches [29][32] Question: Context on NII trends and dividend declaration - The supplemental dividend is lower due to a strategic decision to build NAV rather than payout excess earnings [35][37] Question: Trends in private credit market - There is an improvement in the structure of the pipeline, with better terms and lower leverage asks [42][44] Question: Highlights of realized gains and unrealized depreciation - Realized gains were driven by the sale of Gynasonics, while depreciation was influenced by performance and market multiples [50][52]

Financial Data and Key Metrics Changes - For Q1 2025, total investment income was $35.4 million, and net investment income was $15.6 million, compared to $33.8 million and $14.6 million in Q4 2024, respectively [5][18] - The net asset value (NAV) per share decreased by 2.2% to $13.48 from $13.79 at the end of Q4 2024 [17] - The total investment portfolio's fair value decreased by 6.7% from $1.08 billion in Q4 2024 to $1 billion in Q1 2025 [17] Business Line Data and Key Metrics Changes - The weighted average portfolio risk rating remained stable at 2.33, indicating consistent credit quality [16] - The loan portfolio is primarily composed of first lien senior secured loans, with 97% being floating rate assets [17][18] - The dollar-weighted average annualized yield on the debt portfolio increased to 15.4% in Q1 2025 from 14.7% in Q4 2024 [18] Market Data and Key Metrics Changes - The company executed three investments in existing portfolio companies totaling $50.7 million in funded loans during Q1 2025 [6][16] - The company noted a cautious approach in the healthcare lending sector, reflecting broader market conditions [26][28] Company Strategy and Development Direction - The company aims to optimize its portfolio and expand origination channels following its merger with BC Partners [5][7] - A strategic focus on credit-first underwriting practices is intended to ensure long-term shareholder value, even if it results in slower portfolio growth [8][9] - The company is positioned to benefit from a strategic focus that diversifies its portfolio and mitigates risk [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate ongoing market volatility and emphasized a focus on sustainable growth [12][61] - The management team highlighted a shift in venture-backed companies towards profitability and reduced cash burn, indicating a more cautious investment environment [11][12] - The company anticipates muted deal activity in 2025 but believes there will be a need for non-dilutive growth capital in the future [13] Other Important Information - The company extended its credit facility with KeyBank by three years and restructured its privately placed senior unsecured notes [20] - A new stock repurchase program of $25 million was approved, reflecting management's confidence in the company's valuation [22] - A regular distribution of $0.33 per share and a supplemental dividend of $0.02 per share were declared for Q2 2025 [22] Q&A Session Summary Question: Comments on healthcare lending and its slowdown - Management noted that healthcare lending has been softer and slower, reflecting cautious market conditions [26][27] Question: Update on the investment pipeline - The pipeline is currently seeing a mix of refinances and new opportunities, with a focus on ensuring appropriate structure and pricing [29][30] Question: Trends in net investment income (NII) and dividend declaration - The supplemental dividend for Q2 is lower due to a strategic decision to build NAV rather than prioritize dividend payouts [35][36] Question: Impact of private credit market conditions on pipeline - There is an improvement in the structure of the pipeline, with lower asks in terms of leverage and maintenance of quality covenants [42][43] Question: Highlights of realized gains and unrealized portfolio depreciation - Realized gains were driven by the sale of Gynasonics, while depreciation was influenced by performance and market multiples [50][52]