Nuveen Churchill Direct Lending(NCDL) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Earnings Announcement Nuveen Churchill Direct Lending Corp. reported Q2 2025 net investment income of $0.46 per share, declared a $0.45 per share distribution, and maintained a healthy portfolio with strong liquidity Financial Highlights Nuveen Churchill Direct Lending Corp. reported Q2 2025 net investment income of $0.46 per share and a net increase in net assets from operations of $0.32 per share. The company's NAV per share was $17.92, a slight decrease from the previous quarter. A third quarter regular distribution of $0.45 per share was declared Q2 2025 Per Share Financial Highlights | Metric | Q2 2025 (per share) | | :----------------------------------- | :------------------ | | Net investment income | $0.46 | | Net realized and unrealized loss on investments | $(0.14) | | Net increase in net assets from operations | $0.32 | | Net asset value (NAV) | $17.92 | | Paid Q2 regular distribution | $0.45 | | Declared Q3 regular distribution | $0.45 | - The company completed a nearly $100 million share repurchase program in July, repurchasing approximately 5.9 million shares at a meaningful discount to NAV[3] Management Commentary Management expressed satisfaction with Q2 returns, highlighting a healthy portfolio with a low non-accrual rate of 0.2% and no new non-accruals. They emphasized a disciplined underwriting approach, focus on high-quality investments in resilient sectors, and strong liquidity position with over $300 million - Portfolio remains healthy, with a low non-accrual rate of 0.2% on a fair value basis, and no new non-accruals during the quarter[3][7] - The company maintains over $300 million of liquidity and no near-term debt maturities, positioning it well to take advantage of attractive investment opportunities[3] - Management remains focused on maintaining a highly disciplined approach to underwriting and sourcing high-quality investments in resilient, service-oriented sectors in the core middle market[3] Distribution Declaration The Board of Directors declared a third quarter 2025 regular distribution of $0.45 per share, payable on October 28, 2025, to shareholders of record as of September 30, 2025. This follows a second quarter distribution of $0.45 per share, representing a 10.1% total annualized distribution yield based on Q2 NAV Distribution Declaration | Quarter | Distribution per Share | Payment Date | Record Date | Annualized Yield (Q2 NAV) | | :------ | :--------------------- | :----------- | :---------- | :------------------------ | | Q3 2025 | $0.45 | Oct 28, 2025 | Sep 30, 2025 | N/A | | Q2 2025 | $0.45 | Jul 28, 2025 | N/A | 10.1% | Portfolio Composition and Activity The investment portfolio decreased slightly to $2.0 billion, primarily in first-lien debt, with improved non-accrual rates and net investment outflows during Q2 2025 Portfolio Composition As of June 30, 2025, the fair value of the investment portfolio was $2.0 billion across 207 portfolio companies and 26 industries, a slight decrease from $2.1 billion and 210 companies as of March 31, 2025. The portfolio primarily consists of first-lien debt (90.0%) Portfolio Fair Value and Company Count | Metric | As of Jun 30, 2025 | As of Mar 31, 2025 | Change | | :-------------------- | :----------------- | :----------------- | :----- | | Portfolio Fair Value | $2.0 billion | $2.1 billion | $(0.1) billion | | Portfolio Companies | 207 | 210 | (3) | | Industries | 26 | 26 | 0 | Portfolio Composition by Asset Type (Fair Value) | Asset Type | As of Jun 30, 2025 | As of Mar 31, 2025 | | :----------------- | :----------------- | :----------------- | | First-lien debt | 90.0% | 90.5% | | Subordinated debt | 8.0% | 7.8% | | Equity investments | 2.0% | 1.7% | Portfolio Risk Profile The weighted average Internal Risk Rating of the portfolio remained stable at 4.1. The non-accrual status improved, with investments in one portfolio company representing 0.2% of total investments at fair value, down from two companies and 0.4% in the prior quarter Portfolio Risk Metrics | Metric | As of Jun 30, 2025 | As of Mar 31, 2025 | | :----------------------------------- | :----------------- | :----------------- | | Weighted average Internal Risk Rating | 4.1 | 4.1 | | Non-accrual (fair value) | 0.2% (1 company) | 0.4% (2 companies) | | Non-accrual (amortized cost) | 0.4% | 1.0% | Investment Activity Summary For the three months ended June 30, 2025, the Company funded $81.1 million of portfolio investments and received $162.2 million of proceeds from principal repayments and sales, resulting in net outflows. This contrasts with the prior quarter, which saw $153.0 million funded and $148.4 million received Quarterly Investment Activity | Metric | Q2 2025 (3 months ended Jun 30) | Q1 2025 (3 months ended Mar 31) | | :--------------------------------- | :------------------------------ | :------------------------------ | | Investments funded | $81.1 million | $153.0 million | | Proceeds from repayments and sales | $162.2 million | $148.4 million | Results of Operations for Q2 2025 Q2 2025 saw a decrease in investment income due to lower yields, an increase in net expenses from higher fees, and a net realized loss on investments Investment Income Total investment income for the three months ended June 30, 2025, was $53.1 million, a decrease from $55.1 million for the same period in 2024. This decline was primarily due to a decrease in the weighted average yield of debt and income-producing investments to 10.08% from 11.32% year-over-year, driven by tightening spreads and lower base interest rates Investment Income (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------------------- | :---------- | :---------- | :--------- | | Total Investment Income | $53.1 million | $55.1 million | $(2.0) million | | Weighted average yield of debt and income producing investments (at cost) | 10.08% | 11.32% | (1.24)% | - The decrease in weighted average yield was primarily due to overall tightening of spreads in new investments and the decline in base interest rates[10] Net Expenses Net expenses increased to $30.3 million for the three months ended June 30, 2025, from $24.1 million for the same period in 2024. This rise was mainly due to higher interest and debt financing expenses, increased management fees (due to a base rate increase from 0.75% to 1.00% effective March 31, 2025), and the expiration of the Adviser's incentive fee waiver Net Expenses (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--------------------------------- | :---------- | :---------- | :--------- | | Net Expenses | $30.3 million | $24.1 million | $6.2 million | | Management fee base rate | 1.00% (effective Mar 31, 2025) | 0.75% | +0.25% | | Income based incentive fees | $2.8 million | N/A | N/A | - The increase in management fees was primarily attributable to the increase in the management fee base rate from 0.75% to 1.00%, effective March 31, 2025, and the expiration of the Adviser's waiver of incentive fees[11] Net Realized and Unrealized Gain (Loss) on Investments For Q2 2025, the Company recorded a net realized loss on investments of $(10.7) million, primarily from the restructuring of an underperforming debt position, compared to a net realized gain of $1.0 million in Q2 2024. A net change in unrealized gain of $3.8 million was recorded, mainly due to a reversal of an unrealized loss on the restructured debt, offset by fair value decreases in other underperforming investments Realized and Unrealized Gains/Losses (YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------------------- | :------------ | :------------ | :----------- | | Net realized gain (loss) on investments | $(10.7) million | $1.0 million | $(11.7) million | | Net change in unrealized gain (loss) on investments | $3.8 million | $(12.1) million | $15.9 million | | Total net realized and unrealized gain (loss) on investments | $(6.8) million | $(10.8) million | $4.0 million | - The net realized loss was primarily driven by the restructuring of an underperforming debt position[12] Financial Condition, Liquidity and Capital Resources NCDL maintained strong liquidity with $44.0 million in cash and $260.3 million available credit, while improving its debt to equity ratio to 1.26x Financial Condition, Liquidity and Capital Resources As of June 30, 2025, NCDL had $44.0 million in cash and cash equivalents and $1.1 billion in total debt outstanding. The company maintained strong liquidity with approximately $260.3 million available under its revolving credit facility. The debt to equity ratio improved to 1.26x (1.21x net) from 1.31x (1.25x net) at March 31, 2025 Financial Condition Metrics | Metric | As of Jun 30, 2025 | As of Mar 31, 2025 | | :------------------------------------ | :----------------- | :----------------- | | Cash and cash equivalents | $44.0 million | N/A | | Total debt outstanding | $1.1 billion | N/A | | Available borrowings (revolving credit) | $260.3 million | N/A | | Debt to equity ratio | 1.26x | 1.31x | | Net debt to equity ratio | 1.21x | 1.25x | Corporate Information This section provides details on the Q2 2025 earnings call, company profile, forward-looking statement disclaimers, and contact information Conference Call and Webcast Information Nuveen Churchill Direct Lending Corp. held a conference call on August 6, 2025, at 11:00 AM ET to discuss its Q2 2025 financial results. A live webcast and replay were made available on the company's website - A conference call was held on August 6, 2025, at 11:00 AM Eastern Time to discuss the second quarter 2025 financial results[14] - A live webcast and replay of the conference call are available on the Company's website at https://www.ncdl.com/news/events[15](index=15&type=chunk) About Nuveen Churchill Direct Lending Corp. NCDL is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It operates as a business development company (BDC) and is externally managed by Churchill DLC Advisor LLC and Churchill Asset Management LLC, both affiliates of Nuveen, LLC and TIAA - NCDL is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies[16] - NCDL is regulated as a business development company (BDC) and is externally managed by Churchill DLC Advisor LLC and Churchill Asset Management LLC, which are affiliates of Nuveen, LLC and TIAA[16] Forward-Looking Statements The press release contains forward-looking statements subject to substantial risks and uncertainties, including changes in financial markets, interest rates, trade policy, and general economic conditions. Investors are cautioned not to place undue reliance on these statements, which are based on current expectations and may differ materially from actual results - The press release contains forward-looking statements regarding NCDL's future performance and financial condition, which involve substantial risks and uncertainties[17] - Key risks include changes in financial, capital, and lending markets; changes in the interest rate environment; and general economic, political, and industry trends[17] - Investors should not place undue reliance on these statements, which apply only as of the date of the release, and NCDL does not undertake any obligation to update or revise them[17] Contacts Contact information for investor relations and media inquiries is provided for Nuveen Churchill Direct Lending Corp - Investor relations can be reached via email at NCDL-IR@churchillam.com[18] - Media inquiries can be directed to Madison Hanlon at Prosek Partners (Pro-churchill@prosek.com)[18] Consolidated Financial Statements Consolidated financial statements show a decrease in total assets and net assets, with Q2 2025 net investment income and net increase in net assets from operations declining year-over-year Consolidated Statements of Assets and Liabilities The consolidated balance sheet shows total assets decreased to $2,074,396 thousand as of June 30, 2025, from $2,143,725 thousand at December 31, 2024. Total net assets also decreased to $887,738 thousand from $970,320 thousand over the same period, leading to a NAV per share of $17.92 Consolidated Statements of Assets and Liabilities (Key Figures) | Metric (in thousands) | Jun 30, 2025 | Dec 31, 2024 | Change | | :------------------------------------ | :----------- | :----------- | :------- | | Total assets | $2,074,396 | $2,143,725 | $(69,329) | | Total liabilities | $1,186,658 | $1,173,405 | $13,253 | | Total net assets | $887,738 | $970,320 | $(82,582) | | Net asset value per share | $17.92 | $18.18 | $(0.26) | - Investments at fair value decreased from $2,081,379 thousand at Dec 31, 2024, to $1,992,804 thousand at Jun 30, 2025[19] - Common shares issued and outstanding decreased from 53,387,277 at Dec 31, 2024, to 49,548,098 at Jun 30, 2025, reflecting share repurchases[19] Consolidated Statements of Operations For the three months ended June 30, 2025, net investment income was $22,856 thousand ($0.46 per share), down from $31,008 thousand ($0.57 per share) in the prior year period. The net increase in net assets from operations was $16,016 thousand ($0.32 per share), a decrease from $20,205 thousand ($0.37 per share) in Q2 2024, primarily due to lower investment income and higher expenses Consolidated Statements of Operations (Key Figures - Three Months Ended June 30) | Metric (in thousands, except per share) | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------------------- | :---------- | :---------- | :--------- | | Total investment income | $53,132 | $55,089 | $(1,957) | | Net expenses after incentive fees waived | $30,276 | $24,081 | $6,195 | | Net investment income | $22,856 | $31,008 | $(8,152) | | Net investment income per share | $0.46 | $0.57 | $(0.11) | | Total net realized and unrealized gain (loss) on investments | $(6,840) | $(10,803) | $3,963 | | Net increase in net assets resulting from operations | $16,016 | $20,205 | $(4,189) | | Net increase in net assets resulting from operations per share | $0.32 | $0.37 | $(0.05) | Consolidated Statements of Operations (Key Figures - Six Months Ended June 30) | Metric (in thousands, except per share) | H1 2025 | H1 2024 | YoY Change | | :------------------------------------------------- | :---------- | :---------- | :--------- | | Total investment income | $106,718 | $106,684 | $34 | | Net expenses after incentive fees waived | $56,410 | $45,943 | $10,467 | | Net investment income | $50,308 | $60,741 | $(10,433) | | Net investment income per share | $0.98 | $1.13 | $(0.15) | | Total net realized and unrealized gain (loss) on investments | $(19,271) | $(10,512) | $(8,759) | | Net increase in net assets resulting from operations | $31,037 | $50,229 | $(19,192) | | Net increase in net assets resulting from operations per share | $0.61 | $0.93 | $(0.32) | Detailed Portfolio and Investment Activity Tables Detailed tables show a significant year-over-year decrease in net funded investment activity and new gross commitments for both Q2 and H1 2025, alongside declining weighted average interest rates on new debt Portfolio and Investment Activity (Three Months Ended June 30) For the three months ended June 30, 2025, net funded investment activity was negative $(81.1) million, a significant decrease from $205.0 million in Q2 2024. New gross commitments were $47.7 million, predominantly in first-lien debt, compared to $360.2 million in Q2 2024. The weighted average interest rate on new debt investments decreased to 9.07% from 10.45% year-over-year Net Funded Investment Activity (Q2 YoY) | Metric (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------- | :---------- | :---------- | :--------- | | New gross commitments at par | $47,698 | $360,218 | $(312,520) | | Net investments funded | $81,061 | $304,975 | $(223,914) | | Investments sold or repaid | $(162,202) | $(99,977) | $(62,225) | | Net funded investment activity | $(81,141) | $204,998 | $(286,139) | Gross Commitments by Asset Type (Q2 YoY) | Asset Type (in thousands) | Q2 2025 | Q2 2024 | | :------------------------ | :---------- | :---------- | | First-Lien Debt | $45,224 | $343,237 | | Subordinated Debt | $100 | $14,501 | | Equity Investments | $2,374 | $2,479 | | Total gross commitments | $47,698 | $360,218 | New Investment Activity Rates (Q2 YoY) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :------------------------------------------------- | :-------- | :-------- | :--------- | | Weighted average annual interest rate on new debt investments at par | 9.07% | 10.45% | (1.38)% | | Weighted average annual interest rate on new floating rate debt investments at par | 9.06% | 10.31% | (1.25)% | | Weighted average spread on new floating rate debt investments at par | 4.77% | 4.99% | (0.22)% | Portfolio and Investment Activity (Six Months Ended June 30) For the six months ended June 30, 2025, net funded investment activity was negative $(76.5) million, a substantial shift from positive $354.4 million in H1 2024. New gross commitments decreased significantly to $213.9 million from $567.0 million year-over-year. The weighted average interest rate on new debt investments also declined to 9.31% from 10.37% year-over-year Net Funded Investment Activity (H1 YoY) | Metric (in thousands) | H1 2025 | H1 2024 | YoY Change | | :-------------------------- | :---------- | :---------- | :--------- | | New gross commitments at par | $213,937 | $567,033 | $(353,096) | | Net investments funded | $234,080 | $509,305 | $(275,225) | | Investments sold or repaid | $(310,552) | $(154,873) | $(155,679) | | Net funded investment activity | $(76,472) | $354,432 | $(430,904) | Gross Commitments by Asset Type (H1 YoY) | Asset Type (in thousands) | H1 2025 | H1 2024 | | :------------------------ | :---------- | :---------- | | First-Lien Debt | $197,219 | $544,242 | | Subordinated Debt | $13,330 | $19,816 | | Equity Investments | $3,388 | $2,975 | | Total gross commitments | $213,937 | $567,033 | New Investment Activity Rates (H1 YoY) | Metric | H1 2025 | H1 2024 | YoY Change | | :------------------------------------------------- | :-------- | :-------- | :--------- | | Weighted average annual interest rate on new debt investments at par | 9.31% | 10.37% | (1.06)% | | Weighted average annual interest rate on new floating rate debt investments at par | 9.09% | 10.25% | (1.16)% | | Weighted average spread on new floating rate debt investments at par | 4.80% | 4.93% | (0.13)% |