Core Insights - Business Development Companies (BDCs) are highlighted as a favorable option for generating substantial dividend income through investments in floating rate debt [1] - A hybrid investment strategy combining classic dividend growth stocks, BDCs, Real Estate Investment Trusts (REITs), and Closed-End Funds is suggested to enhance investment income while achieving total returns comparable to traditional index funds like the S&P [1] Investment Strategy - Focusing on BDCs with floating rate debt investments allows investors to benefit from interest rate fluctuations, potentially increasing income [1] - The approach of mixing different asset classes aims to create a balanced portfolio that maximizes both income and growth potential [1]

Sixth Street Specialty Lending (TSLX) Q1 2025 Earnings Call May 01, 2025 08:30 AM ET Company Participants Cami VanHoard - Head of Investor RelationsJoshua Easterly - Chairman, CEO & Co-CIO of the AdviserRobert Stanley - Vice PresidentIan Simmonds - CFOFinian O'shea - Director, WFS ResearchBrian Mckenna - Director - Equity ResearchMickey Schleien - Managing Director, Equity ResearchKenneth Lee - Vice PresidentMaxwell Fritscher - Equity Research AssociateMelissa Wedel - Vice President, U.S. Equities ResearchR ...

Financial Data and Key Metrics Changes - The company reported adjusted net investment income of $0.58 per share, with an annualized return on equity of 13.5%, and adjusted net income of $0.36 per share, with an annualized return on equity of 8.3% for Q1 2025 [8][32] - Total investments decreased to $3.4 billion from $3.5 billion in the prior quarter due to net repayment activity [32] - The weighted average yield on debt and income-producing securities decreased slightly from 12.5% to 12.3% quarter over quarter [24] Business Line Data and Key Metrics Changes - In Q1, the company provided total commitments of $154 million and total funding of $137 million across six new portfolio companies and upsizes to four existing investments [16] - The company experienced $270 million of repayments from seven full and four partial investment realizations, resulting in $133 million of net repayment activity [16] - 89% of total funding this quarter was into new investments, with 11% supporting upsizes to existing portfolio companies [20] Market Data and Key Metrics Changes - The U.S. direct lending market has seen an imbalance with the supply of capital outpacing demand, primarily due to the growth of retail investor-oriented perpetual non-traded BDC structures [14] - The company anticipates that current uncertainty and volatility will moderate the supply and demand imbalance by slowing inflows into non-traded vehicles [15] Company Strategy and Development Direction - The company emphasizes a disciplined capital allocation strategy, with portfolio yields significantly higher than the sector average, at a weighted average yield of 12.5% compared to 11.6% for peers [11] - The company is well-positioned with significant liquidity and capital to invest in what is expected to be a more interesting investment environment [12] - The company plans to maintain a conservative approach to new investments, focusing on risk-adjusted returns and avoiding participation in deals that do not align with shareholder interests [22] Management's Comments on Operating Environment and Future Outlook - Management believes the business remains well protected on the asset side with limited direct exposure to tariffs and is positioned well on the liability side [7] - The company anticipates a quarterly earnings power of approximately $0.50 per share, with potential upside if activity-based fees return to historical averages [10] - Management expressed confidence in the portfolio's credit quality, with non-accruals representing only 1.2% of the portfolio at fair value [26] Other Important Information - The board approved a base quarterly dividend of $0.46 per share and a supplemental dividend of $0.06 per share [12][13] - The company completed two capital market transactions in Q1, including a $300 million issuance of long five-year notes [32] Q&A Session Summary Question: Impact of downward pressure on spreads due to non-traded BDC fundraising - Management noted that retail flows have likely slowed due to market volatility, and the company has a resilient business model that is not solely dependent on sponsor deals [42][44] Question: Outlook for M&A activity - Management is negative on the return of M&A activity in the near term, citing overvaluation of assets and the need for time and growth [51][52] Question: Pricing risk in a volatile environment - Management indicated that the private markets are not effectively pricing risk, but the company uses a fundamental approach to assess asset value and required returns [59] Question: Deployment opportunities in lane two and lane three investments - Management is starting to see more opportunities in these areas but anticipates that more stress is needed across sectors for significant deployment [80] Question: Frequency of capital raises with the ATM program - Management confirmed that there will be no change in the frequency of capital raises, emphasizing that any issuance must be accretive to shareholders [84]

Group 1 - Sixth Street (TSLX) reported revenue of $116.35 million for Q1 2025, a year-over-year decline of 1.2%, with EPS remaining unchanged at $0.58 compared to the previous year [1] - The reported revenue fell short of the Zacks Consensus Estimate of $118.42 million, resulting in a surprise of -1.75%, while the EPS exceeded the consensus estimate of $0.56 by 3.57% [1] - The stock has returned -6.9% over the past month, underperforming the Zacks S&P 500 composite, which saw a change of -0.2% [3] Group 2 - Total investment income from non-controlled non-affiliated investments was $113.92 million, slightly below the average estimate of $114.50 million from two analysts [4] - Investment income from controlled, affiliated investments was reported as $2.43 million, matching the average estimate, while total investment income from these investments was also slightly below the average estimate of $2.44 million [4]

Sixth Street (TSLX) came out with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.58 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.57%. A quarter ago, it was expected that this business development company would post earnings of $0.57 per share when it actually produced earnings of $0.61, delivering a surprise of 7.02%.Over the last four quarte ...

S I X T H S T R E E T S P E C I A L EARNINGS PRESENTATION Quarter Ended March 31, 2025 T Y L E N D I N G DISCLAIMER AND FORWARD-LOOKING STATEMENT References in this presentation ("Presentation") to "TSLX," "we," "us," "our" and "the Company" refer to Sixth Street Specialty Lending, Inc. This Presentation includes forward-looking statements about TSLX that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, esti ...

[First Quarter 2025 Earnings Results](index=1&type=section&id=First%20Quarter%202025%20Earnings%20Results) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Sixth Street Specialty Lending reported Q1 2025 net investment income of **$0.62 per share** and **$0.39 net income per share**, with **NAV at $17.04**, while executing key financing activities | Metric | Q1 2025 Value | | :--- | :--- | | Net Investment Income (NII) per Share | $0.62 | | Adjusted NII per Share | $0.58 | | Net Income (NI) per Share | $0.39 | | Adjusted NI per Share | $0.36 | | Annualized ROE (NII) | 14.4% | | Annualized ROE (NI) | 9.2% | | NAV per Share (End of Period) | $17.04 | - The decline in NAV per share from **$17.16** (Q4 2024) to **$17.04** (Q1 2025) was mainly driven by a **$0.13 per share** reversal of unrealized gains from paydowns/sales and a **$0.06 per share** impact from widening credit spreads[4](index=4&type=chunk) | Dividend Type | Per Share Amount | Record Date | Payment Date | | :--- | :--- | :--- | :--- | | Q2 2025 Base Dividend | $0.46 | June 16, 2025 | June 30, 2025 | | Q1 2025 Supplemental Dividend | $0.06 | May 30, 2025 | June 20, 2025 | - The company issued **$300.0 million** of unsecured notes due in 2030 and entered an interest rate swap, resulting in an effective interest rate of **SOFR plus 153 basis points**[6](index=6&type=chunk) - In March, the company amended its Revolving Credit Facility, extending the maturity to March 2030 for **$1.525 billion** of commitments and reducing borrowing costs[7](index=7&type=chunk) [Portfolio and Investment Activity](index=2&type=section&id=PORTFOLIO%20AND%20INVESTMENT%20ACTIVITY) The company's Q1 2025 portfolio activity reflected reduced new investments and increased exits, resulting in a net reduction, while maintaining a conservative, predominantly floating-rate debt structure | Activity (Principal Amount, Millions) | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | New Investment Commitments | $154.4 | $479.0 | | Investments Funded | $136.8 | $323.5 | | Exits and Repayments | $269.6 | $304.7 | | Portfolio Composition (% of Fair Value) | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | First-Lien Debt | 92.9% | 93.9% | | Second-Lien Debt | 1.0% | 0.6% | | Mezzanine Debt | 1.5% | 1.1% | | Equity and Other | 4.6% | 4.4% | - As of March 31, 2025, **97.0%** of the company's debt investments by fair value were at floating rates, with **100%** of these subject to reference rate floors[12](index=12&type=chunk) | Weighted Average Yield | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | At Fair Value | 12.1% | 12.3% | | At Amortized Cost | 12.3% | 12.5% | - Portfolio credit quality remained stable, with investments on non-accrual status at **1.2%** of fair value as of March 31, 2025, a slight improvement from **1.4%** at year-end 2024[13](index=13&type=chunk) [Results of Operations](index=3&type=section&id=RESULTS%20OF%20OPERATIONS%20FOR%20THE%20THREE%20MONTHS%20ENDED%20MARCH%2031%2C%202025) For Q1 2025, total investment income slightly decreased to **$116.3 million**, while net expenses significantly reduced to **$57.0 million**, leading to an improved debt-to-equity ratio of **1.18x** - Total investment income for Q1 2025 was **$116.3 million**, down slightly from **$117.8 million** in Q1 2024, mainly due to lower interest rates, partially offset by higher activity-based fee income[16](index=16&type=chunk) - Net expenses for Q1 2025 decreased to **$57.0 million** from **$64.6 million** in Q1 2024, primarily because lower reference rates reduced the interest expense on the company's debt[17](index=17&type=chunk) | Debt and Capital Metrics (Millions) | As of Mar 31, 2025 | As of Dec 31, 2024 | | :--- | :--- | :--- | | Total Principal Debt Outstanding | $1,889.2 | - | | Undrawn Revolver Capacity | $1,012.8 | - | | Debt-to-Equity Ratio (Quarter End) | 1.18x | 1.22x | | Average Debt-to-Equity Ratio | 1.19x | 1.23x | [Liquidity and Funding Profile](index=4&type=section&id=LIQUIDITY%20AND%20FUNDING%20PROFILE) As of March 31, 2025, the company maintained a strong liquidity position of **$1.018 billion** (pre-unfunded commitments), with a funding mix of **66% unsecured** debt and a well-laddered maturity profile | Liquidity Position ($ Millions) | As of Mar 31, 2025 | | :--- | :--- | | Revolver Capacity | $1,675 | | Drawn on Revolver | ($639) | | Unrestricted Cash Balance | $5 | | Total Liquidity (Pre-Unfunded Commitments) | $1,018 | | Total Liquidity (Burdened for Unfunded Commitments) | $843 | - The company's funding mix at quarter-end was approximately **66% unsecured** and **34% secured** debt[23](index=23&type=chunk) - The company has a well-managed debt maturity profile, with the nearest maturity of **$300 million** in August 2026. The weighted average remaining maturity on debt is **~4.2 years**[23](index=23&type=chunk) [Financial Statements and Tables](index=6&type=section&id=Financial%20Statements%20and%20Tables) This section presents detailed unaudited financial statements and comparative tables, including financial highlights, consolidated balance sheets, statements of operations, and investment activity, for a comprehensive view of performance [Financial Highlights](index=6&type=section&id=Financial%20Highlights) The financial highlights table provides quarter-over-quarter and year-over-year comparisons, showing Q1 2025 Net Investment Income per share stable at **$0.62** and Net Income per share at **$0.39**, with weighted average debt yield at **12.1%** | Metric (per share) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Asset Value | $17.04 | $17.16 | $17.17 | | Net Investment Income | $0.62 | $0.62 | $0.59 | | Net Income | $0.39 | $0.55 | $0.53 | | Metric (Annualized ROE) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Based on Net Investment Income | 14.4% | 14.4% | 13.8% | | Based on Net Income | 9.2% | 12.8% | 12.5% | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, the consolidated balance sheet reported total assets of **$3.499 billion** and total net assets of **$1.601 billion**, resulting in a NAV per share of **$17.04**, a slight decrease from year-end 2024 | Balance Sheet ($ thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total investments at fair value | $3,412,032 | $3,518,412 | | Total Assets | $3,498,500 | $3,582,225 | | Total Liabilities | $1,897,217 | $1,974,696 | | Total Net Assets | $1,601,283 | $1,607,529 | | Net Asset Value Per Share | $17.04 | $17.16 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2025, total investment income was **$116.3 million**, with net expenses of **$57.0 million**, leading to net investment income of **$58.0 million** and a final net income of **$37.0 million**, or **$0.39 per share** | Statement of Operations ($ thousands) | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total Investment Income | $116,349 | $117,783 | | Net Expenses | $57,021 | $64,571 | | Net Investment Income | $57,978 | $52,362 | | Total Net Unrealized and Realized Gains (Losses) | ($21,023) | ($4,844) | | Increase in Net Assets (Net Income) | $36,955 | $47,518 | | Earnings per common share | $0.39 | $0.53 | [Investment Activity](index=9&type=section&id=Investment%20Activity) Q1 2025 investment activity included **$154.4 million** in new commitments and **$269.6 million** in sales/repayments, with **85.1%** of new debt commitments at floating rates | Investment Activity ($ millions) | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total new investment commitments | $154.4 | $263.6 | | Principal amount of investments funded | $136.8 | $162.8 | | Principal amount of investments sold or repaid | $269.6 | $108.6 | - For new debt investment commitments in Q1 2025, **85.1%** were at floating rates, a decrease from **98.7%** in Q1 2024[37](index=37&type=chunk) [Supplemental Information](index=5&type=section&id=Supplemental%20Information) This section provides logistical details for the earnings call, company background, and important legal disclaimers regarding forward-looking statements and non-GAAP financial measures [Conference Call and Webcast](index=5&type=section&id=Conference%20Call%20and%20Webcast) The company will host a conference call and live webcast on **May 1, 2025**, at **8:30 a.m. Eastern Time**, to discuss its Q1 2025 financial results, with access details provided - A conference call to discuss financial results is scheduled for **8:30 a.m. Eastern Time** on **May 1, 2025**[27](index=27&type=chunk) - A live webcast and a slide presentation will be available on the Investor Resources section of the company's website[27](index=27&type=chunk) [About the Company](index=10&type=section&id=About%20the%20Company) Sixth Street Specialty Lending (TSLX) is a regulated BDC focused on direct origination of senior secured loans to U.S. middle-market companies, externally managed by Sixth Street, a global investment firm with over **$100 billion** in assets - Sixth Street Specialty Lending is a specialty finance company and regulated BDC focused on lending to U.S. middle-market companies[38](index=38&type=chunk) - The company is externally managed by Sixth Street Specialty Lending Advisers, LLC, an affiliate of Sixth Street, a global investment firm with over **$100 billion** in assets under management[38](index=38&type=chunk)[39](index=39&type=chunk) [Forward-Looking Statements and Non-GAAP Measures](index=10&type=section&id=Forward-Looking%20Statements%20and%20Non-GAAP%20Measures) The report includes forward-looking statements subject to risks and uncertainties, and utilizes non-GAAP financial measures like adjusted net investment income to reflect fundamental earnings power - The document includes forward-looking statements, and actual results may differ materially from those projected. The company does not assume an obligation to update these statements[40](index=40&type=chunk) - The company uses non-GAAP measures like **'Adjusted net investment income'** and **'Adjusted net income'** which exclude accrued capital gains incentive fees to better reflect fundamental earnings power[41](index=41&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-36364 Sixth Street Specialty Lending, Inc. (Exact name of registrant as specified in its charter) Delaware 27-3380000 (State or ot ...

Core Insights - Mr. Mavroudis is a professional portfolio manager with a focus on risk management and in-depth financial market analysis [1] - He has successfully navigated major crises, including the COVID-19 pandemic and the PSI [1] - Mr. Mavroudis is the CEO of FAST FINANCE Investment Services, a registered Greek company [1] Professional Background - Mr. Mavroudis holds multiple degrees: MSc in Financial and Banking Management, LLM in Law, and BSc in Economics, graduating as valedictorian [1] - He is a certified portfolio manager and analyst for financial instruments, as well as a specialist in derivatives and securities market-making [1] - He is also a licensed Class A accountant-tax consultant and a member of the Economic Chamber of Greece [1] Contributions to the Industry - Mr. Mavroudis writes daily articles for reputable financial media and appears as a guest commentator on television and online programs [1] - He teaches in educational seminars and has published three books on investments [1] - By writing on Seeking Alpha, he aims to engage with a community of investors and market enthusiasts, fostering mutual growth and knowledge sharing [1]

Company Overview - Sixth Street (TSLX) shares increased by 6.4% to close at $20.38, following a notable trading volume, contrasting with a 13.2% loss over the past four weeks [1] - The company is expected to report quarterly earnings of $0.56 per share, reflecting a year-over-year decline of 3.5%, with revenues projected at $118.57 million, a slight increase of 0.7% from the previous year [2] Earnings Estimates and Market Sentiment - The consensus EPS estimate for Sixth Street has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] Industry Comparison - Crescent Capital BDC (CCAP), a peer in the same industry, saw its shares rise by 7.9% to $15.32, but has experienced a -16.4% return over the past month [3] - CCAP's consensus EPS estimate is $0.52, representing a year-over-year decline of 17.5%, and it currently holds a Zacks Rank of 4 (Sell) [4]