Hercules Capital(HTGC)2025-05-01 20:30Financial Performance - Net investment income (NII) for Q1 2025 was $77.5 million, or $0.45 per share, providing 113% coverage of the base cash distribution[1] - Total investment income decreased to $119.5 million in Q1 2025, down from $121.6 million in Q1 2024[15] - Net investment income for the three months ended March 31, 2025, was $77,458,000, a decrease from $79,162,000 for the same period in 2024[62] - Total investment income for the three months ended March 31, 2025, was $119,511,000, down from $121,553,000 in 2024[62] - The core yield for the three months ended March 31, 2025, was 12.6%, down from 12.9% as of December 31, 2024[64] Assets and Liabilities - As of March 31, 2025, Hercules had over $5.0 billion in assets under management, an increase of 11.0% year-over-year[1] - Total assets as of March 31, 2025, were $4,031,211,000, an increase from $3,831,591,000 as of December 31, 2024[59] - Total liabilities as of March 31, 2025, were $2,030,581,000, compared to $1,842,010,000 as of December 31, 2024[59] Investment Portfolio - The company achieved a net debt portfolio growth of nearly $270.0 million, marking the second highest level historically[5] - The GAAP effective yield on the debt investment portfolio was 13.0% in Q1 2025, compared to 13.7% in Q4 2024[13] - The weighted average grade of the debt investment portfolio was 2.31 as of March 31, 2025, compared to 2.26 as of December 31, 2024[22] - As of March 31, 2025, 98.0% of the debt investment portfolio was priced at floating interest rates, indicating a high sensitivity to interest rate changes[40] - The company had two debt investments on non-accrual with an investment cost of approximately $72.2 million and a fair value of $19.6 million, representing 1.8% and 0.5% of the total investment portfolio at cost and value, respectively[25] Liquidity and Commitments - The company ended Q1 2025 with $615.6 million in available liquidity, including $51.2 million in unrestricted cash and cash equivalents[28] - Hercules had $455.7 million of available unfunded commitments, representing 11.3% of total assets, which remained stable from the previous quarter[34] - Hercules closed $1.02 billion in new debt and equity commitments in Q1 2025, with pending commitments of $682.5 million in signed non-binding term sheets as of April 28, 2025[35] Shareholder Value - The net asset value (NAV) was $11.55, a decrease of 0.9% from Q4 2024[8] - The net asset value (NAV) as of March 31, 2025, was $2.00 billion, with NAV per share decreasing by 0.9% to $11.55[39] - The net asset value per share as of March 31, 2025, was $11.55, slightly down from $11.66 as of December 31, 2024[59] - The company sold 2.0 million shares of common stock under the equity ATM program for total net proceeds of $39.4 million during Q1 2025[29] Ratings and Acquisitions - Hercules reported an investment grade rating upgrade to BBB (high) from Morningstar DBRS, reflecting its scale and diversified investment platform[5] - Hercules' portfolio company Voyager Technologies, Inc. confidentially filed for an IPO under the JOBS Act in January 2025, with an initial venture debt commitment of $58.0 million starting June 2024[49] - bluebird bio, Inc. was acquired for approximately $96.0 million by funds managed by Carlyle and SK Capital Partners LP, with Hercules having committed $125.0 million in venture debt financing[49] - Next Insurance, Inc. signed a definitive agreement to be acquired by Munich RE for $2.6 billion in cash, with Hercules committing $12.5 million in venture debt financing[49] - 3Gtms, LLC was acquired by Descartes Systems Group for approximately $115.0 million, with Hercules having committed $41.3 million in venture debt financing[49]