TriplePoint Venture Growth(TPVG) - 2025 Q2 - Quarterly Results

Executive Summary Second Quarter 2025 Highlights TriplePoint Venture Growth BDC Corp. reported strong Q2 2025 results, achieving the highest level of closed commitments and fundings since FY2022, with significant increases from the prior quarter. The company declared a third-quarter distribution of $0.23 per share and saw a net increase in net assets from operations of $0.33 per share - Closed $160.1 million of new debt commitments, a 109% increase from the prior quarter and the highest amount in three years[4] - Funded $78.5 million in debt investments, a 188% increase from the prior quarter and the highest level of funding activity in the last 10 quarters[4] Q2 2025 Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :----------------------------------- | :------ | :------ | | Net Investment Income (NII) | $11.3M | $12.6M | | NII per Share | $0.28 | $0.33 | | Net Increase in Net Assets from Operations | $13.2M | $8.6M | | Net Increase in Net Assets per Share | $0.33 | $0.22 | | Weighted Average Annualized Portfolio Yield on Debt Investments | 14.5% | 15.8% | | Return on Average Equity | 13.0% | - | | NAV per Share | $8.65 | $8.62 (as of Mar 31, 2025) | | Declared Q3 2025 Distribution per Share | $0.23 | - | - The Adviser amended its income incentive fee waiver to waive, in full, its quarterly income incentive fee for the remainder of fiscal year 2025[4] - Sponsor, TPC, announced a discretionary share purchase program to acquire up to $14 million of the Company's outstanding common stock[4] Year to Date 2025 Highlights For the first six months of 2025, TPVG continued to demonstrate strong origination activity and maintained a solid portfolio yield. The company's credit rating was confirmed as investment grade, and it reported substantial undistributed taxable earnings - Signed $556.9 million of term sheets and closed $236.6 million of new debt commitments[4] - Funded $106.2 million in debt investments with a 12.6% weighted average annualized portfolio yield at origination, and $1.1 million in direct equity investments[4] YTD 2025 Financial Metrics | Metric | YTD 2025 | YTD 2024 | | :----------------------------------- | :------- | :------- | | Net Investment Income (NII) | $22.0M | $28.1M | | NII per Share | $0.55 | $0.74 | | Net Increase in Net Assets from Operations | $25.9M | $16.6M | | Net Increase in Net Assets per Share | $0.64 | $0.43 | | Paid Distributions per Share | $0.60 | - | | Weighted Average Annualized Portfolio Yield on Debt Investments | 14.5% | 15.6% | - DBRS, Inc. confirmed TPVG's investment grade rating, with a BBB (low) Long-Term Issuer rating and a stable trend outlook in April 2025[4] - Estimated undistributed taxable earnings (spillover income) of $42.0 million, or $1.04 per share, as of June 30, 2025[4] Management Commentary Management highlighted robust portfolio growth driven by strong commitments and fundings, emphasizing a continued focus on increased scale, diversification, and sector rotation to capitalize on demand from venture-growth stage companies. They also underscored efforts to strengthen shareholder alignment and build long-term value - Chairman and CEO, Jim Labe, noted that the debt investment portfolio grew in Q2 driven by robust commitments and fundings, with a strong pipeline at TPC, and a continued path of increased scale, diversification, and sector rotation[6] - President and CIO, Sajal Srivastava, emphasized implemented steps to strengthen alignment with shareholders and demonstrate continued support from TriplePoint Capital, focusing on positioning TPVG for the future and building long-term shareholder value[6] Operational and Investment Review Portfolio and Investment Activity During Q2 2025, the Company significantly increased its debt commitments and fundings, while also acquiring warrants and making direct equity investments. The debt investment portfolio showed a strong weighted average annualized yield, and the overall portfolio at fair value increased compared to the prior year - Entered into $160.1 million of new debt commitments with eight portfolio companies and funded debt investments totaling $78.5 million to nine portfolio companies[7] - Acquired warrants in nine portfolio companies with a cost basis of $1.0 million and made direct equity investments of $1.1 million in five portfolio companies[7] - Debt investments funded during the quarter carried a weighted average annualized portfolio yield of 12.3% at origination, with the overall weighted average annualized portfolio yield on debt investments for the quarter at 14.5%[7] Investment Activity | Investment Activity (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------- | :------ | :------ | :------- | :------- | | Beginning portfolio at fair value | $682,012 | $773,605 | $676,249 | $802,145 | | New debt investments, net | $78,187 | $37,727 | $105,514 | $50,882 | | Scheduled principal amortization | $(11,311) | $(27,884) | $(21,192) | $(34,696) | | Principal prepayments and early repayments | $(44,979) | $(51,239) | $(62,761) | $(82,081) | | Ending portfolio at fair value | $717,885 | $713,770 | $717,885 | $713,770 | Signed Term Sheets TPC entered into $241.5 million of non-binding term sheets with venture growth stage companies during Q2 2025, indicating a strong pipeline of potential investment opportunities, though these are subject to various underwriting conditions - TPC entered into $241.5 million of non-binding term sheets with venture growth stage companies during the three months ended June 30, 2025[9] - These opportunities are subject to underwriting conditions, including due diligence, definitive documentation, and investment committee approval, with no assurance of completion or assignment to the Company[9] Unfunded Commitments As of June 30, 2025, the Company's total unfunded commitments stood at $184.7 million, with a portion dependent on portfolio companies achieving specific milestones. These commitments are scheduled to expire over the next few years, but do not necessarily represent future cash requirements as they may not be drawn - Total unfunded commitments were $184.7 million as of June 30, 2025, with $27.3 million dependent upon portfolio companies reaching certain milestones[10] Unfunded Commitments by Expiration Year | Expiration Year | Unfunded Commitments (in millions) | | :-------------- | :--------------------------------- | | 2025 | $19.6 | | 2026 | $88.6 | | 2027 | $76.5 | - Unfunded commitments do not necessarily represent future cash requirements or future earning assets as they may expire without being drawn[10] Financial Performance Analysis Results of Operations The Company's Q2 2025 results showed a decrease in total investment and other income primarily due to a lower weighted average principal outstanding and reduced prepayment income. Despite this, net increase in net assets from operations improved significantly year-over-year, driven by lower operating expenses and reduced net realized losses Consolidated Results of Operations | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :----------------------------------- | :------ | :------ | :------- | :------- | | Total Investment and Other Income | $23.3M | $27.1M | $45.7M | $56.4M | | Weighted Average Annualized Portfolio Yield | 14.5% | 15.8% | 14.5% | 15.6% | | Total Operating Expenses (net of waiver) | $12.0M | $14.5M | $23.7M | $28.3M | | Net Investment Income | $11.3M | $12.6M | $22.0M | $28.1M | | Net Investment Income per Share | $0.28 | $0.33 | $0.55 | $0.74 | | Net Realized Gains (Losses) on Investments | $(32K) | $(18.8M) | $2.2M | $(27.7M) | | Net Change in Unrealized Gains (Losses) on Investments | $1.9M | $14.9M | $1.6M | $16.1M | | Net Increase in Net Assets from Operations | $13.2M | $8.6M | $25.9M | $16.6M | | Net Increase in Net Assets per Share | $0.33 | $0.22 | $0.64 | $0.43 | - The decrease in total investment and other income was primarily due to a lower weighted average principal amount outstanding on income-bearing debt, lower investment yields (partially due to decreases in the Prime rate), and less prepayment income[12] - Total operating expenses for Q2 2025 included a $1.3 million income incentive fee waiver, contributing to a decrease from $14.5 million in Q2 2024 to $12.0 million[13] Credit Quality The Company's debt investment portfolio maintained a weighted average investment ranking of 2.17 as of June 30, 2025, a slight increase from the prior quarter. While most investments remained in the 'White' category, there were some downgrades for specific portfolio companies - The weighted average investment ranking of the Company's debt investment portfolio was 2.17 as of June 30, 2025, compared to 2.12 at the end of the prior quarter[19] - During Q2 2025, one portfolio company ($2.1 million principal) was downgraded from White (2) to Yellow (3), and another ($11.1 million principal) was downgraded from White (2) to Orange (4)[19] Debt Investment Portfolio Credit Quality | Credit Category | June 30, 2025 Fair Value (in thousands) | June 30, 2025 % of Total Debt Investments | June 30, 2025 Number of Portfolio Companies | Dec 31, 2024 Fair Value (in thousands) | Dec 31, 2024 % of Total Debt Investments | Dec 31, 2024 Number of Portfolio Companies | | :-------------- | :-------------------------------------- | :---------------------------------------- | :------------------------------------------ | :------------------------------------- | :---------------------------------------- | :------------------------------------------ | | Clear (1) | $28,391 | 4.8% | 2 | $51,986 | 9.3% | 3 | | White (2) | $467,423 | 79.0% | 33 | $392,237 | 70.0% | 31 | | Yellow (3) | $58,307 | 9.9% | 4 | $84,847 | 15.1% | 4 | | Orange (4) | $36,388 | 6.2% | 6 | $30,979 | 5.5% | 5 | | Red (5) | $56 | 0.1% | 1 | $56 | 0.1% | 1 | | Total | $590,565 | 100.0% | 46 | $560,105 | 100.0% | 44 | Capital Management and Outlook Net Asset Value The Company's Net Asset Value (NAV) per share increased slightly to $8.65 as of June 30, 2025, reflecting a modest growth from the end of the previous fiscal year Net Asset Value Summary | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Net Assets | $348.7M | $345.7M | | Net Asset Value per Share | $8.65 | $8.61 | Liquidity and Capital Resources As of June 30, 2025, the Company maintained strong liquidity, primarily composed of cash and available capacity under its Revolving Credit Facility. Its leverage ratios remained within prudent levels, demonstrating sound capital management - Total liquidity was $312.5 million, consisting of $62.5 million in cash, cash equivalents, and restricted cash, and $250.0 million in available capacity under its Revolving Credit Facility[22] Leverage Ratios | Metric | Value | | :-------------------------- | :---- | | Gross Leverage Ratio | 1.22x | | Net Leverage Ratio | 1.04x | | 1940 Act Asset Coverage Ratio | 182% | Distribution The Board of Directors declared a regular quarterly distribution of $0.23 per share for the third quarter of 2025. The Company also reported a significant amount of estimated undistributed taxable earnings, providing flexibility for future distributions - A regular quarterly distribution of $0.23 per share for the third quarter was declared, payable on September 30, 2025[23] - Estimated undistributed taxable earnings (spillover income) were $42.0 million, or $1.04 per share, as of June 30, 2025[23] TPC Stock Purchase Program TriplePoint Capital LLC, the Company's sponsor, initiated a discretionary share purchase program to acquire up to $14 million of TPVG's common stock over the next twelve months, aiming to purchase shares below the then-current NAV per share - Sponsor, TriplePoint Capital LLC, announced a discretionary share purchase program to acquire up to $14 million of the Company's outstanding common stock[24] - Purchases will occur over the next twelve months at prices below the then-current NAV per share, through various methods including open market and privately negotiated transactions[24] Recent Developments Subsequent to the second quarter end, the Company continued its strong origination and funding activities, securing additional non-binding term sheets and closing new debt commitments, alongside funding new investments - From June 30, 2025, through August 5, 2025, TPC's direct originations platform entered into $57.7 million of additional non-binding signed term sheets[26] - The Company closed $114.0 million of additional debt commitments and funded $20.5 million in new investments[26] Corporate Information About TriplePoint Venture Growth BDC Corp. TriplePoint Venture Growth BDC Corp. is an externally-managed business development company specializing in customized debt financing, warrants, and direct equity investments for venture growth stage companies in technology and other high-growth industries, supported by TriplePoint Capital - TPVG is an externally-managed BDC providing customized debt financing with warrants and direct equity investments to venture growth stage companies[27] - It focuses on companies in technology and other high-growth industries, backed by select venture capital firms[27] - TriplePoint Capital, the sponsor, is a global investment platform offering comprehensive financing solutions to venture capital-backed companies at all development stages[27] Forward-Looking Statements This section contains standard cautionary language regarding forward-looking statements, emphasizing that actual results may differ materially due to various risks and uncertainties, and the Company undertakes no obligation to update these statements - The press release contains forward-looking statements that are not guarantees of future performance and involve substantial risks and uncertainties[28] - Actual events, investment activity, performance, condition, or results may differ materially due to factors including changes in economic, market, or other conditions, as detailed in SEC filings[28] - Readers are cautioned not to place undue reliance on these statements, and the Company undertakes no obligation to publicly update or revise them[28] Non-GAAP Financial Measures The Company discusses its net leverage ratio as a non-GAAP financial measure to provide additional insight into its leverage and financial condition. This measure is used internally for monitoring but should not be considered in isolation or as a substitute for GAAP-compliant financial analysis - The Company uses the non-GAAP net leverage ratio (total debt less cash, cash equivalents, and restricted cash divided by total net assets) to supplement GAAP financial information[29] - This measure helps management monitor and evaluate leverage and financial condition, enhancing investors' ability to analyze trends[29] - It has limitations and should not be considered in isolation or as a substitute for GAAP results, nor is it necessarily comparable to non-GAAP measures used by other companies[29][30] Investor Relations and Media Contact Contact information for investor relations and media inquiries is provided through The IGB Group - For investor relations and media inquiries, contact Leon Berman at The IGB Group[31] Financial Statements Consolidated Statements of Assets and Liabilities The consolidated statement of assets and liabilities shows an increase in total assets and net assets as of June 30, 2025, compared to December 31, 2024, driven by growth in investments and cash, while liabilities also increased due to higher Revolving Credit Facility utilization and new notes Consolidated Statements of Assets and Liabilities | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :------------------------------------------------ | :------------------------ | :---------------- | | Assets | | | | Investments at fair value | $717,885 | $676,249 | | Cash and cash equivalents | $62,391 | $45,899 | | Restricted cash | $147 | $32,828 | | Total assets | $788,250 | $763,040 | | Liabilities | | | | Revolving Credit Facility | $50,000 | $5,000 | | 2025 Notes, net | — | $69,948 | | 2026 Notes, net | $199,701 | $199,483 | | 2027 Notes, net | $124,531 | $124,396 | | 2028 Notes, net | $49,362 | — | | Total liabilities | $439,573 | $417,353 | | Net Assets | | | | Total net assets | $348,677 | $345,687 | | Shares of common stock outstanding | 40,324 | 40,137 | | Net asset value per share | $8.65 | $8.61 | Consolidated Statements of Operations The consolidated statements of operations show a decrease in total investment and other income for both the three and six months ended June 30, 2025, compared to the prior year. However, a significant reduction in net realized losses and an increase in net change in unrealized gains led to a higher net increase in net assets resulting from operations for the current periods Consolidated Statements of Operations | (in thousands, except per share data) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Interest income from investments | $22,504 | $26,590 | $44,089 | $55,118 | | Total investment and other income | $23,276 | $27,107 | $45,730 | $56,381 | | Total operating expenses net of Income incentive fee waiver | $12,001 | $14,503 | $23,717 | $28,254 | | Net investment income | $11,275 | $12,604 | $22,013 | $28,127 | | Net investment income per share | $0.28 | $0.33 | $0.55 | $0.74 | | Net realized gains (losses) on investments | $(32) | $(18,846) | $2,222 | $(27,653) | | Net change in unrealized gains (losses) on investments | $1,931 | $14,859 | $1,628 | $16,122 | | Net increase (decrease) in net assets resulting from operations | $13,174 | $8,617 | $25,863 | $16,596 | | Net increase (decrease) in net assets per share | $0.33 | $0.22 | $0.64 | $0.43 | | Regular distributions declared per share | $0.30 | $0.40 | $0.60 | $0.80 | Weighted Average Portfolio Yield on Debt Investments The weighted average annualized portfolio yield on debt investments for Q2 and YTD 2025 remained strong at 14.5%, though slightly lower than the prior year. This yield is composed of coupon income, accretion of discounts and end-of-term payments, and the impact of prepayments Weighted Average Portfolio Yield Components | Ratios (Percentages, on an annualized basis) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :----------------------------------------- | :------ | :------ | :------- | :------- | | Weighted average portfolio yield on debt investments | 14.5% | 15.8% | 14.5% | 15.6% | | Coupon income | 11.5% | 11.6% | 11.5% | 11.9% | | Accretion of discount | 0.9% | 0.8% | 1.0% | 0.9% | | Accretion of end-of-term payments | 1.2% | 1.5% | 1.3% | 1.5% | | Impact of prepayments during the period | 0.9% | 1.9% | 0.7% | 1.3% | - The weighted average portfolio yields are calculated as the annualized rate of interest income recognized divided by the average amortized cost of debt investments, excluding non-income producing debt but including non-accrual status debt[37]