Core Insights - The article emphasizes the importance of innovation and disruption in the financial sector, particularly focusing on high-tech and early growth companies [1] Group 1: Investment Focus - The company is keen on identifying growth buyouts and value stocks as potential investment opportunities [1] - There is a strong emphasis on monitoring the pace of high-tech advancements and their impact on investment strategies [1] Group 2: Research and Analysis - The article aims to provide readers with comprehensive research and insights into current events affecting the industry [1] - It highlights the significance of understanding market dynamics to uncover potential investment risks and opportunities [1]

Core Insights - The article emphasizes the importance of a hybrid investment strategy that combines high-quality dividend stocks with other investment vehicles 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 company advocates for a balanced approach to investing, focusing on both growth and income to maximize investment returns [1]. - The strategy aims to create a solid base of classic dividend growth stocks, which can lead to efficient income generation [1]. Performance Comparison - The total return from the proposed hybrid investment strategy is reported to be on par with the S&P 500 index, indicating its effectiveness in delivering competitive returns [1].

Group 1 - Investors in Sixth Street Specialty Lending, Inc. (TSLX) should monitor the stock due to significant activity in the options market, particularly the Jun 20, 2025 $30.00 Call which has high implied volatility [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in the stock's price, potentially due to an upcoming event [2] - Sixth Street Specialty Lending currently holds a Zacks Rank 3 (Hold) in the Financial - Mortgage & Related Services industry, which is in the bottom 44% of the Zacks Industry Rank [3] Group 2 - Over the past 60 days, two analysts have raised their earnings estimates for the current quarter while two have lowered theirs, resulting in a flat Zacks Consensus Estimate of 56 cents for the current quarter [3] - The high implied volatility may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility, aiming for the underlying stock to not move as much as expected at expiration [4]

Sixth Street Specialty Lending, Inc. (NYSE:TSLX) Q4 2024 Earnings Conference Call February 14, 2025 8:30 AM ET Company Participants Cami VanHorn - Head, Investor Relations Joshua Easterly - Chief Executive Officer Bo Stanley - President Ian Simmonds - Chief Financial Officer Conference Call Participants Finian O'Shea - Wells Fargo Securities Brian McKenna - Citizens JMP Mickey Schleien - Ladenburg Ken Lee - RBC Capital Markets Melissa Wedel - JPMorgan Robert Dodd - Raymond James Maxwell Fritscher - Truist P ...

S I X T H S T R E E T S P E C I A L EARNINGS PRESENTATION Quarter Ended December 31, 2024 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, e ...

Core Insights - Sixth Street (TSLX) reported revenue of $123.7 million for Q4 2024, a year-over-year increase of 3.5% [1] - The earnings per share (EPS) for the same period was $0.61, slightly down from $0.62 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $120.07 million by 3.03%, while the EPS surpassed the consensus estimate of $0.57 by 7.02% [1] Financial Performance Metrics - Total investment income from non-controlled non-affiliated investments was $121.26 million, exceeding the two-analyst average estimate of $118.02 million [4] - Investment income from controlled, affiliated investments was $2.44 million, matching the average estimate from two analysts [4] - Overall, the stock has returned +3.8% over the past month, slightly underperforming the Zacks S&P 500 composite's +3.9% change [3] Analyst Ratings - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

分组1 - Sixth Street (TSLX) reported quarterly earnings of $0.61 per share, exceeding the Zacks Consensus Estimate of $0.57 per share, but down from $0.62 per share a year ago, representing an earnings surprise of 7.02% [1] - The company posted revenues of $123.7 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.03%, compared to year-ago revenues of $119.5 million [2] - Sixth Street shares have increased approximately 4.2% since the beginning of the year, outperforming the S&P 500's gain of 2.9% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.56 on revenues of $117.47 million, and for the current fiscal year, it is $2.22 on revenues of $470.19 million [7] - The Zacks Industry Rank indicates that the Financial - Mortgage & Related Services sector is currently in the bottom 46% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Performance - For the year ended December 31, 2024, net investment income per share was $2.39 and net income per share was $2.03, with Q4 figures at $0.62 and $0.55 respectively [2]. - The company's adjusted net investment income for the year was $2.33 per share and adjusted net income was $1.97 per share, with Q4 adjusted figures at $0.61 and $0.54 respectively [3]. - Net investment income for the year ended December 31, 2024, was $220.0 million, up from $196.4 million in 2023, marking a growth of 12.0% [38]. - Net income for the same period was $186.6 million, a decrease from $222.0 million in 2023, indicating a decline of 16.0% [38]. - Total investment income for the year was $482.5 million, up from $438.1 million in 2023, with Q4 investment income at $123.7 million compared to $119.5 million in Q4 2023 [16][18]. - Total investment income for the year was $482.5 million, compared to $438.1 million in 2023, reflecting an increase of 10.1% [38]. Asset and Investment Growth - The reported net asset value (NAV) per share increased to $17.16 at December 31, 2024, up from $17.12 at September 30, 2024, driven by over-earning of the base dividend and realized gains on investments [4]. - Investments at fair value increased to $3,518.4 million as of December 31, 2024, up from $3,283.1 million a year earlier, representing a growth of 7.1% [33]. - Total assets rose to $3,582.2 million, compared to $3,343.8 million in the previous year, reflecting an increase of 7.1% [33]. - The annualized return on equity based on net investment income was 14.4%, up from 13.7% in the previous quarter [33]. Debt and Financing - The company had total principal debt outstanding of $1,954.1 million as of December 31, 2024, with a debt-to-equity ratio of 1.22x [20][21]. - The weighted average yield of debt and income-producing securities at fair value was 12.3% as of December 31, 2024, down from 13.1% at September 30, 2024 [11][14]. - As of December 31, 2024, 97.2% of debt investments based on fair value bore interest at floating rates, with 100% subject to reference rate floors [11]. - The percentage of debt investment commitments at floating rates was 97.2%, slightly down from 99.7% a year earlier [33]. Investment Commitments - New investment commitments for the year totaled $1,242.9 million, a significant increase from $958.6 million in 2023, with Q4 commitments at $479.0 million compared to $269.3 million in Q3 2024 [7][9]. - Total new investment commitments for 2024 reached $1,242.9 million, a 29.6% increase from $958.6 million in 2023 [40]. - Gross originations for 2024 were $15,354.7 million, significantly higher than $6,516.6 million in 2023 [40]. - The principal amount of investments funded in 2024 was $838.9 million, compared to $808.4 million in 2023, reflecting a 3.1% increase [40]. - The number of new investment commitments in new portfolio companies increased to 34 in 2024 from 30 in 2023 [40]. - The weighted average interest rate of new investment commitments decreased to 10.9% in 2024 from 12.9% in 2023 [40]. - The percentage of new debt investment commitments at floating rates was 87.6% in 2024, down from 99.5% in 2023 [40]. - The average new investment commitment amount in new portfolio companies rose to $30.4 million in 2024 from $29.2 million in 2023 [40]. - The weighted average term for new investment commitments in new portfolio companies was 6.2 years in 2024, slightly up from 6.0 years in 2023 [40]. - The principal amount of investments sold or repaid in 2024 totaled $793.7 million, a significant increase from $469.1 million in 2023 [40]. Dividends and Non-Accrual Investments - The company declared a first quarter 2025 base dividend of $0.46 per share and a fourth quarter supplemental dividend of $0.07 per share [4]. - Non-accrual investments represented 1.4% of the portfolio at fair value as of December 31, 2024, with no new investments added to non-accrual status during the quarter [12]. Management - The company is externally managed by Sixth Street Specialty Lending Advisers, LLC, leveraging over $100 billion in assets under management [41].

Investment Portfolio - As of December 31, 2024, the company had made investments with an aggregate fair value of $3,518.4 million, an increase from $3,283.1 million as of December 31, 2023[49]. - The composition of investments included $3,302.5 million in first-lien debt, $19.8 million in second-lien debt, $39.1 million in mezzanine debt, and $155.5 million in equity and other investments as of December 31, 2024[50]. - The total net unrealized loss for investments was $20.8 million as of December 31, 2024, compared to a net unrealized gain of $32.1 million as of December 31, 2023[50][51]. - The company’s investment portfolio included 116 portfolio companies as of December 31, 2024, down from 136 companies as of December 31, 2023[49]. - The industry composition of investments at fair value showed a decrease in Business Services from 18.0% in 2023 to 13.3% in 2024, while Internet Services increased from 15.1% to 16.4%[51]. - The geographic composition of investments indicated a decrease in the Northeast region from 25.4% in 2023 to 21.7% in 2024, while the Midwest region increased from 10.7% to 14.3%[52]. - The company aims to limit downside potential by negotiating covenants that provide portfolio companies with flexibility while preserving capital[50]. - The company’s investment strategy includes a focus on U.S.-domiciled middle-market companies through direct originations of senior secured loans[44]. - Total portfolio company commitments increased to $356.3 million as of December 31, 2024, up from $316.1 million in 2023, representing a growth of approximately 12.5%[55]. Debt and Financing - Total debt as of December 31, 2024, was $2,650.0 million, with an aggregate principal outstanding of $1,954.1 million[62]. - The Revolving Credit Facility had a committed principal amount of $1,700.0 million, with $1,004.1 million outstanding as of December 31, 2024[62]. - The company reported a decrease in available amounts under the Revolving Credit Facility from $820.2 million in 2023 to $674.2 million in 2024[62]. - The company is actively managing its debt obligations to maintain compliance with asset coverage ratios and covenants[61]. - Interest expense for the year ended December 31, 2024, was $105.2 million, an increase of 10.8% from $95.5 million in 2023, and significantly higher than $49.9 million in 2022[66]. - Total interest expense for 2024 reached $154.2 million, up 15.5% from $133.7 million in 2023, and more than double the $63.0 million reported in 2022[66]. - Average debt outstanding increased to $1,882.7 million in 2024, compared to $1,705.6 million in 2023 and $1,342.0 million in 2022, reflecting a growth of 10.4% year-over-year[66]. - The weighted average interest rate rose to 7.5% in 2024, compared to 7.3% in 2023 and significantly higher than 3.9% in 2022[66]. Regulatory Compliance - The company is subject to regulatory restrictions under the 1940 Act, which may limit its operational flexibility compared to competitors[58]. - The company is regulated as a Business Development Company (BDC) under the 1940 Act, which imposes specific regulatory requirements[106]. - The company must distribute at least 90% of its investment company taxable income to maintain its status as a RIC, avoiding corporate-level U.S. federal income tax[67]. - The company is subject to periodic examination by the SEC for compliance with the 1940 Act[115]. - The company has received an exemptive order from the SEC allowing co-investment with affiliates in middle-market loan origination activities[117]. - The company must ensure that at least 70% of its total assets are qualifying assets as defined under the 1940 Act[119]. - The company is restricted from acquiring more than 3% of the voting stock of any investment company under the 1940 Act[112]. - The company has adopted codes of ethics for its officers and advisers to ensure compliance with federal securities laws[126]. Management and Fees - Management fees for the year ended December 31, 2024, were $51.8 million, an increase of 11.6% from $46.4 million in 2023, and up from $39.9 million in 2022[80]. - The Adviser waived management fees of $1.5 million in 2024, $1.2 million in 2023, and $0.4 million in 2022 under the Leverage Waiver[82]. - For the year ended December 31, 2024, Incentive Fees amounted to $40.2 million, a decrease from $47.0 million in 2023 and an increase from $24.5 million in 2022[88]. - Realized Incentive Fees payable to the Adviser for the years ended December 31, 2024, 2023, and 2022 were $45.5 million, $42.6 million, and $33.4 million, respectively[88]. - The Adviser incurred administrative service expenses of $3.9 million, $3.2 million, and $3.1 million for the years ended December 31, 2024, 2023, and 2022, respectively[92]. - The Investment Advisory Agreement was renewed in November 2024 and will remain in effect until November 2025, subject to required approvals[90]. - The Administration Agreement was also renewed in November 2024, with a similar duration and termination clause as the Investment Advisory Agreement[94]. - The Adviser has not waived any Incentive Fees for the years ended December 31, 2024, 2023, and 2022[88]. Interest Rate Risk - The company has a significant exposure to interest rate risk, with potential annualized impacts on net interest income ranging from $38.1 million for a 300 basis point increase to $(6.3) million for a 50 basis point decrease[504]. - The company may utilize hedging instruments such as interest rate swaps to mitigate interest rate fluctuations, but such strategies may limit potential benefits[505]. - The company regularly assesses its exposure to interest rate risk and manages it by comparing interest rate-sensitive assets to liabilities[502]. - The company may borrow in foreign currencies to establish natural hedges against investments denominated in those currencies[506]. Operational Insights - The company does not anticipate any substantial change in the nature of its business operations[111]. - The company expects to distribute substantially all of its earnings on a quarterly basis, but may defer distributions under certain circumstances[141]. - The company is subject to a 4% U.S. federal excise tax if it does not distribute sufficient amounts to meet tax requirements[140]. - The company invests primarily in illiquid debt and equity securities of private companies, which are valued at fair value determined by the Board[500]. - The company may incur withholding and other foreign taxes on investments in foreign securities, which could affect distributions to stockholders[143]. - As of December 31, 2024, 97.2% of the company's debt investments based on fair value bore interest at floating rates, with 100.0% subject to interest rate floors[503]. - The company is permitted to issue common stock below net asset value per share, subject to board approval and stockholder consent, with the current approval expiring on May 25, 2024[114]. - The company has a commitment to fund investments in current portfolio companies as of December 31, 2024, although specific figures were not disclosed[53].

Sixth Street Specialty Lending (NYSE: TSLX ) is currently one of my go-to BDCs, as the it is well-established withstand the decreasing interest rate environment in temrs of its dividend coverage and at the same time - increase the strength ofWelcome 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 dividend investing. I believe it’s o ...