Runway Growth Finance (RWAY)2025-03-20 20:02Investment Portfolio - As of December 31, 2024, the company had investments in 57 portfolio companies, an increase from 52 companies as of December 31, 2023[339]. - The fair value of total investments as of December 31, 2024, was 1,067,009,000 as of December 31, 2023[340]. - The ending investment portfolio as of December 31, 2024, was 1,067.0 million at the end of 2023[343]. - Total investments amount to 1,076,840,000, representing a total investment growth of 209.17%[438]. - Total investments in Application Software accounted for 44.64% of the portfolio, with a principal amount of 229,817,000[426]. - Total investments in Data Processing & Outsourced Services represented 22.32% of the portfolio, with a principal amount of 114,902,000[426]. - Total investments in Human Resource & Employment Services are valued at 3,431,000, showing a decrease[429]. - Total equity investments amount to 48,119,000, representing a decrease of approximately 10.1%[431]. - The company holds warrants in various sectors, with a total fair value of 2,961,000, indicating a significant potential upside[431]. Financial Performance - Net investment income for the year ended December 31, 2024, was 78.3 million in 2023[347]. - Total investment income for the year ended December 31, 2024, was 164.2 million in 2023[351]. - Operating expenses for the year ended December 31, 2024, were 85.9 million in 2023, primarily due to lower performance-based incentive fees and management fees[353]. - The net increase in net assets resulting from operations for the year ended December 31, 2024, was 44.3 million in 2023[361]. - Net cash provided by operating activities decreased to 112,437,000 in 2023, reflecting a decline of 38.0%[423]. - Dividends paid to stockholders decreased to 73,322,000 in 2023, a reduction of 4.0%[423]. Debt and Liquidity - As of December 31, 2024, the company had 5.8 million in cash and cash equivalents[370]. - The company had 24.8 million available based on achieved milestones[375]. - The asset coverage ratio as of December 31, 2024, was 192%, compared to 205% in 2023[371]. Investment Strategy - The company aims to maximize total return primarily through current income on its loan portfolio and secondarily through capital gains on warrants and equity positions[334]. - The company’s investment strategy focuses on high growth-potential companies in sectors such as technology and healthcare[334]. - The company has the ability to co-invest with other accounts managed by its investment adviser, enhancing investment opportunities and diversification[338]. Regulatory Compliance - The company is regulated as a business development company (BDC) and a regulated investment company (RIC), requiring compliance with various regulatory requirements[335]. - The Company intends to maintain its status as a RIC, which generally exempts it from U.S. federal income taxes on distributed income and gains, provided it meets certain requirements[503]. Valuation and Fair Value - The fair value of the company's debt investments is determined using a discounted cash flow model, comparing the cost basis to the fair value, with interest rate spreads based on similar borrowers' credit profiles[491]. - The fair value of investments is determined using a multi-step valuation process, with significant management judgment involved for Level 3 assets[486]. - The Audit Committee assists the Board of Directors in reviewing the fair value of investments that are not publicly traded or for which current market values are not readily available[487]. Shareholder Actions - The company repurchased 1,961,938 shares for an aggregate purchase price of 12.5 million under the Third Repurchase Program as of December 31, 2024[379]. Market Risks - The company is subject to financial market risks, including changes in interest rates, which could materially impact its net investment income[385]. - A hypothetical 200 basis point increase in interest rates could increase the company's investment income by a maximum of $17.2 million annually[388].