Owl Rock(OBDC) - 2025 Q2 - Quarterly Results

Financial Results and Highlights OBDC reported solid Q2 2025 earnings with adjusted NII of $0.40 per share, a slight NAV decrease, and strong portfolio fundamentals with low non-accruals Second Quarter 2025 Highlights OBDC reported solid Q2 2025 earnings with adjusted NII of $0.40 per share, a slight NAV decrease, and strong portfolio fundamentals with non-accrual investments at 0.7% of fair value - The CEO highlighted another quarter of solid earnings, generating a 10.6% annualized return on adjusted net investment income, and emphasized the portfolio's strong fundamental performance[4] Q2 2025 Key Metrics vs. Q1 2025 | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | GAAP NII per share | $0.42 | - | | Adjusted NII per share | $0.40 | $0.39 | | NAV per share | $15.03 | $15.14 | | Investments on Non-Accrual (at FV) | 0.7% | 0.8% | - Investment activity in Q2 2025 showed new commitments of $1.1 billion, which was exceeded by $1.9 billion in sales and repayments, indicating a net portfolio paydown during the quarter[6] Dividend Declarations The Board declared a regular Q3 dividend of $0.37 per share and a supplemental Q2 dividend of $0.02 per share, totaling $0.39 per share for the quarter Dividend Details | Dividend Type | Quarter | Amount per Share | Record Date | Payable Date | | :--- | :--- | :--- | :--- | :--- | | Regular | Q3 2025 | $0.37 | Sep 30, 2025 | On or before Oct 15, 2025 | | Supplemental | Q2 2025 | $0.02 | Aug 29, 2025 | On or before Sep 15, 2025 | - The total dividends declared of $0.39 per share for the second quarter represent an annualized dividend yield of 10.4%[6] Select Financial Highlights Key financial metrics for Q2 2025 show adjusted NII per share at $0.40 and net debt-to-equity decreasing to 1.17x from 1.26x Comparative Financial Highlights (Per Share) | Per Share Amounts | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | GAAP NII | $0.42 | $0.41 | $0.48 | | Adjusted NII | $0.40 | $0.39 | $0.48 | | Net Asset Value (NAV) | $15.03 | $15.14 | $15.36 | Balance Sheet and Leverage Highlights | ($ in thousands, except ratio) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total investments at fair value | $16,868,782 | $17,692,006 | $13,341,982 | | Net assets | $7,682,397 | $7,739,089 | $5,994,284 | | Net debt-to-equity | 1.17x | 1.26x | 1.20x | Portfolio Analysis The portfolio was valued at $16.9 billion, diversified across 233 companies, with 75.8% in first-lien senior secured debt and non-accruals at 0.7% of fair value Portfolio Composition and Quality The $16.9 billion portfolio is diversified across 233 companies, with 75.8% in first-lien senior secured debt and non-accruals at a low 0.7% of fair value - The portfolio consists of investments in 233 companies across 30 industries, with an aggregate size of $16.9 billion and an average investment size of $72.4 million at fair value as of June 30, 2025[10] Portfolio Composition by Investment Type (at Fair Value) | Investment Type | Q2 2025 % of Total | Q1 2025 % of Total | | :--- | :--- | :--- | | First-lien senior secured debt | 75.8% | 77.5% | | Second-lien senior secured debt | 5.4% | 5.0% | | Unsecured debt | 2.2% | 2.1% | | Preferred equity | 3.3% | 3.1% | | Common equity | 11.0% | 10.2% | Key Portfolio Metrics | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | % of debt investments at floating rates | 97.6% | 96.5% | | Weighted avg. yield of accruing debt (at FV) | 10.6% | 10.7% | | % of investments on non-accrual (at FV) | 0.7% | 0.8% | Portfolio and Investment Activity Q2 2025 saw $1.1 billion in new commitments and $1.9 billion in sales/repayments, leading to a net portfolio reduction, with new debt investments 99.0% floating rate - For Q2 2025, new investment commitments were $1.1 billion, while sales and repayments totaled $1.9 billion[12][13] - This compares to $1.2 billion in commitments and $1.1 billion in repayments in Q1 2025[13] Investment Activity for the Three Months Ended June 30 | ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total new investment commitments | $1,116,767 | $3,296,799 | | Total principal amount of new investments funded | $906,035 | $2,305,430 | | Total principal amount of investments sold or repaid | $(1,906,887) | $(1,146,773) | - New debt investment commitments in Q2 2025 were 99.0% floating rate, with a weighted average spread over the applicable base rate of 5.4%[14] Financial Performance Analysis Investment income increased to $485.8 million in Q2 2025 due to higher non-recurring income, while total operating expenses rose to $266.8 million, driven by increased interest expense and merger-related fees Results of Operations Q2 2025 investment income increased to $485.8 million due to non-recurring income, while total operating expenses rose to $266.8 million from merger-related costs Investment Income Investment income increased to $485.8 million in Q2 2025, primarily driven by a significant rise in non-recurring income from unscheduled paydowns - The increase in investment income was primarily due to a rise in prepayment-related income and accelerated amortization of upfront fees from unscheduled paydowns[16] Income from Unscheduled Paydowns | Period | Amount | | :--- | :--- | | Q2 2025 | $32.1 million | | Q1 2025 | $8.2 million | Expenses Total operating expenses increased to $266.8 million in Q2 2025, mainly due to higher interest, management, and incentive fees from the recent merger - The primary drivers for the increase in total operating expenses were higher interest expense, management fees, and incentive fees resulting from the Merger[17] Liquidity and Capital Resources As of June 30, 2025, the company maintained strong liquidity with $360.2 million cash, $9.3 billion debt, and $3.7 billion undrawn capacity, complying with all covenants Liquidity Position as of June 30, 2025 | Metric | Amount | | :--- | :--- | | Cash and restricted cash | $360.2 million | | Total principal value of debt outstanding | $9.3 billion | | Undrawn capacity on credit facilities | $3.7 billion | | Unsecured notes | $5.5 billion | - The company's funding mix was composed of 41% secured and 59% unsecured borrowings, and it was in compliance with all financial covenants under its credit facilities[18] Consolidated Financial Statements This section presents detailed consolidated financial statements, including highlights, balance sheets, and statements of operations, providing a comprehensive view of the company's financial position and performance Financial Highlights (Detailed) Detailed financial highlights compare GAAP and Non-GAAP metrics, showing Q2 2025 total investment income of $485.8 million and GAAP net investment income of $216.7 million Detailed Financial Highlights | ($ in thousands, except per share) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total investment income | $485,843 | $464,646 | $396,760 | | Net investment income | $216,708 | $201,302 | $189,134 | | NII per share (GAAP) | $0.42 | $0.41 | $0.48 | | Adjusted NII per share (Non-GAAP) | $0.40 | $0.39 | $0.48 | | Net increase in net assets | $137,506 | $242,635 | $122,220 | Consolidated Statements of Assets and Liabilities As of June 30, 2025, the balance sheet shows total assets of $17.4 billion, total liabilities of $9.7 billion, and net assets of $7.7 billion, with NAV per share at $15.03 Balance Sheet Summary | ($ in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total investments at fair value | $16,868,782 | $13,194,545 | | Total Assets | $17,398,476 | $13,865,564 | | Total Liabilities | $9,716,079 | $7,912,723 | | Total Net Assets | $7,682,397 | $5,952,841 | | Net Asset Value Per Share | $15.03 | $15.26 | Consolidated Statements of Operations For Q2 2025, total investment income was $485.8 million, operating expenses $266.8 million, resulting in net investment income of $216.7 million and a net asset increase of $137.5 million Income Statement Summary (Three Months Ended June 30) | ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total Investment Income | $485,843 | $396,760 | | Total Operating Expenses | $266,849 | $205,216 | | Net Investment Income After Taxes | $216,708 | $189,134 | | Total Net Realized and Unrealized Gain (Loss) | $(79,202) | $(66,914) | | Net Increase in Net Assets | $137,506 | $122,220 | Non-GAAP Financial Measures This section explains and reconciles non-GAAP financial measures, such as Adjusted Net Investment Income, used by management to provide a clearer view of operational performance by excluding merger-related accounting impacts Explanation of Non-GAAP Measures Non-GAAP measures, like Adjusted Net Investment Income, are used to clarify operational performance by excluding non-cash income and gains from Merger accounting under ASC 805 - The Merger with OBDE was accounted for as an asset acquisition, establishing a new cost basis for acquired investments, which creates non-cash accretion/amortization through interest income and unrealized gains/losses[35] - Management uses non-GAAP measures like 'Adjusted Net Investment Income' to evaluate ongoing results without the distorting effects of the Merger's purchase accounting, which also aligns with the calculation of incentive fees payable to the Adviser[36] - Key non-GAAP measures include 'Adjusted Total Investment Income' and 'Adjusted Net Investment Income', which exclude the amortization or accretion of interest income resulting from the new cost basis established by ASC 805[37] Reconciliation of Non-GAAP Measures Tables reconcile GAAP to non-GAAP metrics, showing Q2 2025 GAAP Net Investment Income of $217 million adjusted to $206 million, or $0.40 per share Reconciliation of Net Investment Income (Q2 2025) | ($ in millions, except per share) | Amount | Per Share | | :--- | :--- | :--- | | Net investment income (GAAP) | $217 | $0.42 | | Less: purchase discount amortization | $(11) | $(0.02) | | Adjusted net investment income (Non-GAAP) | $206 | $0.40 | Reconciliation of Net Increase in Net Assets (Q2 2025) | ($ in millions, except per share) | Amount | Per Share | | :--- | :--- | :--- | | Net increase in net assets (GAAP) | $138 | $0.27 | | Adjustments for purchase discount | $0 | $0.00 | | Adjusted net increase in net assets (Non-GAAP) | $138 | $0.27 | Corporate Information and Events This section provides an overview of Blue Owl Capital Corporation and details regarding its upcoming conference call and webcast for Q2 2025 financial results About Blue Owl Capital Corporation Blue Owl Capital Corporation (OBDC) is a BDC lending to U.S. middle-market companies, with a $16.9 billion portfolio across 233 companies as of June 30, 2025 - OBDC is a specialty finance company focused on lending to U.S. middle-market companies and is regulated as a business development company (BDC)[24] - As of June 30, 2025, OBDC's portfolio was valued at $16.9 billion across 233 portfolio companies[24] Conference Call and Webcast Information The company will host a conference call and webcast on August 7, 2025, at 10:00 a.m. ET, to discuss Q2 2025 financial results, with replay options available - The conference call is scheduled for August 7, 2025, at 10:00 a.m. Eastern Time[19] - Participants can access the call via webcast on the company's website or by using the provided domestic and international dial-in numbers[19][20][22] - An archived replay of the call will be available for 14 days via the website and dial-in numbers[21]