Runway Growth Finance (US:RWAY)2025-05-12 20:06Investment Portfolio Performance - As of March 31, 2025, the total fair value of the company's portfolio investments was $1,004,233,000, a decrease from $1,076,840,000 as of December 31, 2024[220]. - The company held investments in 52 companies as of March 31, 2025, down from 57 companies at the end of 2024[219]. - The investment portfolio value decreased from $1,016.3 million as of March 31, 2024, to $1,004.2 million as of March 31, 2025, reflecting a decline of approximately 1.2%[224]. - The fair value of debt investments rated 2 increased to $706.8 million, representing 70.38% of the total portfolio as of March 31, 2025, up from 62.39% as of December 31, 2024[225]. Investment Income and Expenses - Total investment income for the three months ended March 31, 2025, was $35.4 million, down from $40.0 million in the same period of 2024, representing a decrease of about 14.5%[232]. - Net investment income for the three months ended March 31, 2025, was $15.6 million, compared to $18.7 million in 2024, a decline of approximately 16.5%[229]. - Operating expenses decreased to $19.8 million for the three months ended March 31, 2025, from $21.3 million in 2024, a reduction of approximately 7.0%[233]. - Management fees for Q1 2025 remained unchanged at $4.0 million compared to Q1 2024[235]. - Incentive fees decreased to $3.9 million in Q1 2025 from $4.7 million in Q1 2024, primarily due to a decrease in net investment income[236]. Debt Investments - Senior secured term loans accounted for 92.22% of the total portfolio fair value as of March 31, 2025[220]. - The company reported a dollar-weighted average remaining term of 34 months for its debt investments as of March 31, 2025[220]. - The company has committed principal amounts for debt investments ranging from $6.0 million to $75.0 million, with annual interest rates between 6.3% and 14.1%[220]. - As of March 31, 2025, 96.3% of the performing debt portfolio investments bore interest at variable rates, with 76.0% based on SOFR and 24.0% based on Prime[265]. Realized and Unrealized Gains - The company reported a net realized gain on investments of $6.1 million for the three months ended March 31, 2025, compared to no realized gains in the same period of 2024[229]. - The company had a net change in unrealized loss on investments of $19.8 million for the three months ended March 31, 2025, compared to a loss of $6.6 million in the same period of 2024[229]. - The net realized gain on investments was $6.1 million in Q1 2025, attributed to gains from Gynesonics, Inc. and losses from Quantum Corporation[238]. - Net change in unrealized loss on investments was $19.8 million in Q1 2025, primarily due to a decrease in fair value of several investments[239]. Liquidity and Commitments - Available liquidity as of March 31, 2025, was $315.4 million, including $18.4 million in cash and cash equivalents[247]. - As of March 31, 2025, the company had $162.2 million in unfunded commitments, including $132.8 million for debt financing[252]. Interest Rate Risk - A hypothetical 200 basis point increase in interest rates could increase investment income by a maximum of $17.0 million, while a decrease could reduce it by a maximum of $11.0 million annually[265]. - The net investment income is dependent on the difference between the borrowing rate and the investment rate, with rising interest rates potentially reducing net investment income if interest income does not correspondingly increase[267]. - As of March 31, 2025, the company did not have any hedging instruments to manage interest rate risk[270]. Company Structure and Management - The company is structured as a business development company (BDC) and a regulated investment company (RIC), which requires compliance with various regulatory requirements[214]. - 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[213]. - The company is externally managed by Runway Growth Capital LLC, which provides investment advisory services[216].