Trinity Capital, Inc. (NASDAQ:TRIN) Q4 2024 Earnings Conference Call February 26, 2025 12:00 PM ET Company Participants Ben Malcolmson - Head, IR Kyle Brown - CEO, President, Chief Investment Officer & Director Michael Testa - CFO & Treasurer Gerald Harder - COO Ronald Kundich - Chief Credit Officer Conference Call Participants Matthew Hurwit - Jefferies Doug Harter - UBS Paul Johnson - KBW Christopher Nolan - Ladenburg Thalmann Operator Good morning. My name is David, and I will be your conference operator ...

Core Insights - Trinity Capital Inc. reported a record quarterly net investment income of $35 million, or $0.58 per share, for Q4 2024, and an annual net investment income of $116 million, or $2.20 per share [1][10] - The company achieved a total investment income growth of 31% year-over-year for 2024, with total investment income reaching $237.7 million [1][10] - The return on average equity (ROAE) for Q4 2024 was 17.4%, while the return on average assets (ROAA) was 7.6% [10] Fourth Quarter 2024 Highlights - Total investment income for Q4 2024 was $70.8 million, a 48.1% increase from $47.8 million in Q4 2023 [5][10] - Net investment income for Q4 2024 was approximately $34.6 million, compared to $25.1 million in Q4 2023 [8][10] - The effective yield on average debt investments at cost was 16.4% for Q4 2024, slightly down from 16.7% in Q4 2023 [5] Full Year 2024 Highlights - Total gross investments funded for the year reached $1.2 billion, marking a 91.6% increase year-over-year [10] - The net asset value (NAV) at the end of Q4 2024 was $823 million, or $13.35 per share, up from $611 million at the end of 2023 [12][10] - The company maintained its 20th consecutive quarter of consistent or increased regular dividends, with a distribution of $0.51 per share for Q4 2024 [10][22] Portfolio and Investment Activity - As of December 31, 2024, the investment portfolio had a fair value of approximately $1.73 billion, with $1.29 billion in secured loans [13][10] - The company originated approximately $410.6 million in new commitments during Q4 2024 [14][10] - Total investment exits and repayments during the quarter amounted to approximately $280.6 million [15][10] Liquidity and Capital Resources - As of December 31, 2024, the company had approximately $496.6 million in available liquidity, including $9.6 million in unrestricted cash [18][10] - The KeyBank Credit Facility was expanded to $600 million during the quarter [20][10] - The company's leverage ratio was approximately 108% at the end of Q4 2024, down from 122% at the end of Q3 2024 [21][10]

Financing Activities - Trinity Capital completed a private equity offering, issuing 8,333,333 shares for approximately $125.0 million in gross proceeds[17]. - The company also completed a private debt offering of $125.0 million in unsecured 7.00% Notes due 2025[18]. - The company has established a joint venture to co-manage investments in secured loans and equipment financings to growth-stage companies[22]. - The company has established relationships with major technology banks to facilitate seamless collaboration in investment opportunities[63]. - A share repurchase program has been authorized for up to $30 million over 12 months, but there is no assurance that it will enhance long-term stockholder value[152]. Investment Strategy - Trinity Capital targets investments in growth-oriented companies with expected annual revenues of up to $100 million, which are often underserved by traditional lenders[26]. - The company's loans and equipment financings generally range from $5 million to $50 million, limiting each to approximately 5% or less of total assets[29]. - Trinity Capital's investment strategy includes obtaining warrants or contingent exit fees from portfolio companies, providing additional potential returns[25]. - The company seeks to invest in a diverse range of industries and geographic regions, not limited to any specific sector[53]. - The company aims to provide portfolio companies with access to growth capital that may only be available through incremental equity investments[49]. Market Conditions and Risks - The annual venture debt market in the U.S. surpassed $30 billion for the fourth consecutive year in 2024, indicating significant growth opportunities[43]. - The demand for loans and equipment financings for growth-oriented companies is estimated to be 20% to 30% of annual venture equity investment activity[47]. - The financing products offered by traditional lenders often impose restrictive covenants, making them less attractive to growth-oriented companies[46]. - The company faces risks related to changes in interest rates and inflation rates, which could impact its financial condition and results of operations[114]. - Economic conditions, including fluctuations in demand for equipment, interest rates, and inflation rates, pose risks that could threaten the ability to operate profitably[165]. Regulatory Compliance - The company is classified as an emerging growth company and plans to utilize reduced disclosure requirements under the JOBS Act for up to five years following its IPO[78]. - The company has elected to be regulated as a Business Development Company (BDC) under the 1940 Act, which imposes specific restrictions on transactions and requires a majority of independent directors[80]. - To qualify as a BDC, at least 70% of the company's total assets must consist of qualifying assets, with a significant focus on investments in eligible portfolio companies[82]. - The company must maintain an asset coverage ratio of at least 150%, allowing it to borrow $2 for every $1 of investor equity[89]. - The company intends to qualify as a Regulated Investment Company (RIC) for U.S. federal income tax purposes, which would exempt it from federal income tax on distributed income[95]. Portfolio Management and Valuation - The company has developed a proprietary credit rating system to evaluate and underwrite prospective portfolio companies[40]. - The company's debt investment portfolio had a weighted average risk rating score of 2.9 as of December 31, 2024[75]. - A significant portion of the company's portfolio investments will be recorded at fair values determined by the Board, leading to uncertainty in valuation[148]. - The Board will adjust quarterly the valuation of the portfolio, with changes recorded as net change in unrealized gain or loss on investments[151]. - The company expects most of its investments to be classified as Level 3 in the fair value hierarchy, indicating reliance on unobservable inputs and significant management judgment[150]. Competitive Landscape - The company operates in a highly competitive market for investment opportunities, which could reduce returns and result in losses[122]. - A significant part of the company's competitive advantage lies in the underserved market for investments in small, fast-growing private companies, but increased competition could force less attractive investment terms[124]. - The equipment financing industry is highly competitive, with significant pressure on financing rates and resale prices due to competition from financial institutions and leasing companies[163]. - The company may face conflicts of interest due to managing other investment funds that operate in the same line of business[156]. - The company relies on strong referral relationships with venture capital sponsors for deal flow, and failure to maintain these relationships could adversely affect its business[114]. Financial Performance and Distributions - The company must distribute at least 90% of its investment company taxable income annually[96]. - The company may have difficulty paying required distributions if it recognizes income before receiving cash representing such income[118]. - If expenses exceed investment company taxable income, the company may experience a net operating loss for the year, which cannot be carried forward[103]. - The company may be subject to U.S. federal income tax at corporate rates if it fails to qualify as a RIC, impacting its ability to make distributions[105]. - The company must meet certain "asset coverage" tests to make distributions while debt obligations are outstanding, or it risks failing to qualify for tax treatment as a RIC[101]. Investment Risks - The company faces competitive pressures that may adversely affect its financial condition, results of operations, and cash flows, potentially leading to decreased net interest income and increased credit loss risk[123]. - The company may need to refinance its indebtedness, and market conditions could affect the ability to do so on favorable terms[139]. - Defaults under credit facilities could force the company to sell investments at disadvantageous prices, negatively impacting financial condition and results[143]. - The company may face limitations on how borrowed funds can be used, which could restrict operational flexibility and growth potential[142]. - The company may face significant risks in the Finance and Insurance industry due to complex federal and state laws and potential regulatory restrictions[195].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 4, 2025 TRINITY CAPITAL INC. (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: (Exact name of Registra ...

Group 1: Investment Announcement - Trinity Capital Inc. has committed $15 million in growth capital to Cagent Vascular Inc., which is a significant addition to the $45 million equity financing led by US Venture Partners in 2024 [1][4] - This investment aims to support Cagent Vascular's innovative vascular treatment technologies, particularly their flagship product, Serranator®, which enhances angioplasty procedures [2][4] Group 2: Company Overview - Cagent Vascular Inc. specializes in developing advanced endovascular solutions to improve patient outcomes in minimally invasive interventions, particularly for peripheral artery disease [2][6] - The company's Serration technology has been utilized in over 20,000 procedures, demonstrating a growing body of clinical evidence supporting its effectiveness [4][6] Group 3: Strategic Partnership - Trinity Capital expresses excitement about partnering with Cagent Vascular to expand their platform of solutions for treating peripheral artery disease [3][4] - Cagent Vascular's leadership emphasizes the importance of this additional capital in scaling their commercial infrastructure and accelerating clinical adoption of their technologies [4]

Core Insights - Trinity Capital Inc. announced preliminary estimates for its financial results for Q4 and the full year ended December 31, 2024, indicating a strong performance in net investment income and asset valuation [1][2] Financial Estimates - The preliminary estimate of net investment income for Q4 2024 is projected to be between $0.58 and $0.60 per share [2] - The estimated net asset value per share as of December 31, 2024, is expected to be in the range of $13.32 to $13.37 [2] - The estimated investment assets at fair value as of December 31, 2024, are approximately $1.7 billion [2] - Investments on non-accrual status are estimated to comprise about 0.8% of the total debt investment portfolio at fair value and approximately 2.6% at cost as of December 31, 2024 [2] Conference Call Information - A conference call to discuss the financial results will be held on February 26, 2025, at 12:00 p.m. Eastern Time [3] Company Overview - Trinity Capital Inc. is an international alternative asset manager focused on providing stable returns through access to the private credit market, investing in growth-oriented companies [4]

Group 1 - Trinity Capital (NASDAQ: TRIN) has garnered attention for its focus on dividend investing, particularly in quality blue-chip stocks, BDCs, and REITs [1] - The CEO of Trinity Capital has been noted for his insights, which contribute to the positive perception of the company [1] - The investment strategy emphasizes a buy-and-hold approach, aiming to supplement retirement income through dividends within the next 5-7 years [1] Group 2 - The article expresses a beneficial long position in shares of ARCC and BXSL, indicating confidence in these investments [2] - The author emphasizes that the opinions expressed are personal and not influenced by compensation from any company mentioned [2] - Seeking Alpha clarifies that past performance does not guarantee future results, highlighting the importance of individual due diligence [3]

Core Insights - Trinity Capital Inc. has committed $25 million in growth capital to Wisetack, a leading pay-over-time platform for home services [1][3] Company Overview - Trinity Capital Inc. is an alternative asset manager focused on providing stable returns through private credit market investments, targeting growth-oriented companies [4][6] - Wisetack specializes in consumer financing for home services, allowing customers to set up pay-over-time options easily [2][5] Market Position and Growth - Wisetack has demonstrated exceptional growth, strong customer experience, and a solid position in a large market, particularly in home services [3] - The partnership with Trinity Capital is expected to accelerate Wisetack's growth and innovation in the home services market [4][5] Technology and Integration - Wisetack's platform integrates seamlessly with existing software tools used by home service businesses, facilitating the offering of financing options [2][3] - The company also has a growing presence in sectors like dental care, elective medical care, and car repair, indicating diversification [5][6]

Company Overview - Trinity Capital Inc. is a leading alternative asset manager focused on providing stable and consistent returns through access to the private credit market [3] - The company sources, vets, and invests in dynamic privately funded growth-oriented companies, offering investors a strong and diversified portfolio [3] - Headquartered in Phoenix, Arizona, Trinity has an international presence supported by a dedicated team of strategically located investment professionals [3] Credit Rating - DBRS, Inc. has confirmed Trinity Capital's investment grade credit rating of "BBB (low)" with a stable outlook [1] - Morningstar DBRS is recognized as a leading provider of independent rating services, rating over 4,000 issuers and 60,000 securities globally [2]

Company Overview - Trinity Capital Inc. is a leading alternative asset manager focused on providing stable returns through private credit market investments [4] - Elucent Medical is a pioneering medical technology company specializing in guided surgical technologies aimed at improving patient outcomes [5] Investment Details - Trinity Capital announced a commitment of $30 million in growth capital to Elucent Medical [1] - This investment follows Elucent's earlier Series C funding round in 2024, where the company raised $44 million [3] Technology and Innovation - Elucent Medical's EnVisio® System utilizes In-Body Spatial Intelligence™ to enhance surgical precision by providing 3D awareness to surgeons [2] - The system integrates SmartClip® markers and SmartSensor™ technology to guide soft-tissue surgical excision, redefining surgical accuracy [2][5] Strategic Goals - Elucent Medical aims to scale operations and accelerate innovation and commercialization efforts with the new capital from Trinity Capital [3] - The company is committed to driving advancements in surgical oncologic care, positively impacting both patients and medical professionals [5]