MSCC(MAIN) - 2025 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION This section presents Main Street Capital Corporation's unaudited financial statements, management's discussion, and market risk disclosures Item 1. Consolidated Financial Statements This section presents Main Street Capital Corporation's unaudited consolidated financial statements and comprehensive notes for the periods ended June 30, 2025, and December 31, 2024 Consolidated Balance Sheets These statements present Main Street's financial position as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | |:---|:---|:---| | ASSETS ||| | Total investments at fair value | $5,093,070 | $4,932,669 | | Cash and cash equivalents | $86,984 | $78,251 | | Total assets | $5,287,766 | $5,121,341 | | LIABILITIES ||| | Credit Facilities | $477,000 | $384,000 | | Total liabilities | $2,403,549 | $2,323,503 | | NET ASSETS ||| | Total net assets | $2,884,217 | $2,797,838 | | NET ASSET VALUE PER SHARE | $32.30 | $31.65 | - Total assets increased by $166,425 thousand (3.25%) from December 31, 2024, to June 30, 2025, primarily due to growth in investments at fair value[11] - Net Asset Value (NAV) per share increased from $31.65 at December 31, 2024, to $32.30 at June 30, 2025[11] Consolidated Statements of Operations These statements detail Main Street's financial performance for the three and six months ended June 30, 2025, and 2024 Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Total investment income | $143,973 | $132,154 | $281,019 | $263,759 | | Total expenses | $(50,639) | $(44,854) | $(97,875) | $(86,653) | | Net investment income | $88,183 | $83,899 | $174,080 | $170,330 | | Net realized gain (loss) | $52,420 | $3,414 | $22,875 | $(8,954) | | Net unrealized appreciation (depreciation) | $(18,951) | $23,044 | $44,239 | $63,693 | | Net increase in net assets from operations | $122,534 | $102,688 | $238,616 | $209,835 | | Net investment income per share | $0.99 | $0.97 | $1.96 | $1.99 | | Net increase in net assets from operations per share | $1.37 | $1.19 | $2.68 | $2.45 | - Total investment income increased by 9% for the three months ended June 30, 2025, and by 7% for the six months ended June 30, 2025, compared to the prior year periods[13] - Net realized gain significantly increased to $52,420 thousand for the three months ended June 30, 2025, from $3,414 thousand in the prior year, and shifted from a loss to a gain for the six-month period[13] - Net unrealized appreciation shifted to a depreciation of $(18,951) thousand for the three months ended June 30, 2025, from an appreciation of $23,044 thousand in the prior year, but remained positive for the six-month period[13] Consolidated Statements of Changes in Net Assets These statements illustrate changes in Main Street's net assets from operations, capital raises, and dividends for the periods ended June 30, 2025 Changes in Net Assets (in thousands, except shares) | Metric | Balances as of December 31, 2024 | Balances as of June 30, 2025 | |:---|:---|:---| | Common stock (shares) | 88,400,391 | 89,282,595 | | Common stock (par value) | $884 | $893 | | Additional paid-in capital | $2,394,492 | $2,429,817 | | Total undistributed earnings | $402,462 | $453,507 | | Total net assets | $2,797,838 | $2,884,217 | | Net increase in net assets resulting from operations (6 months) | N/A | $238,616 | | Dividends to stockholders (6 months) | N/A | $(187,571) | - Total net assets increased by $86,379 thousand from December 31, 2024, to June 30, 2025, primarily driven by net increase in net assets from operations and capital raises[15] - Public offerings of common stock generated $16,031 thousand in net proceeds for the six months ended June 30, 2025[15] - Dividends to stockholders totaled $(187,571) thousand for the six months ended June 30, 2025[15] Consolidated Statements of Cash Flows These statements outline Main Street's cash sources and uses for the six months ended June 30, 2025, and 2024 Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---| | Net cash provided by (used in) operating activities | $82,125 | $(304,551) | | Net cash provided by (used in) financing activities | $(73,392) | $274,940 | | Net increase (decrease) in cash and cash equivalents | $8,733 | $(29,611) | | Cash and cash equivalents as of end of period | $86,984 | $30,472 | | Dividends paid | $(168,050) | $(157,212) | | Proceeds from Credit Facilities | $607,000 | $1,395,000 | | Repayments on Credit Facilities | $(514,000) | $(1,130,000) | - Net cash provided by operating activities significantly improved to $82,125 thousand for the six months ended June 30, 2025, compared to a net cash outflow of $(304,551) thousand in the prior year[18] - Net cash used in financing activities was $(73,392) thousand for the six months ended June 30, 2025, primarily due to dividends paid and net repayments on credit facilities, a reversal from the $274,940 thousand provided in the prior year[18] - Cash and cash equivalents increased by $8,733 thousand, reaching $86,984 thousand at June 30, 2025[18] Consolidated Schedule of Investments – June 30, 2025 This schedule details Main Street's investment portfolio as of June 30, 2025, categorized by control level and providing specifics on individual portfolio companies Investment Portfolio Summary (in thousands) | Category | Cost | Fair Value | |:---|:---|:---| | Control Investments | $1,561,120 | $2,295,565 | | Affiliate Investments | $790,583 | $856,226 | | Non-Control/Non-Affiliate Investments | $2,001,002 | $1,941,279 | | Total Portfolio Company investments | $4,352,705 | $5,093,070 | | Money market funds | $19,041 | $19,041 | - Control investments represent 79.6% of net assets at fair value, while Affiliate investments represent 29.7% and Non-Control/Non-Affiliate investments represent 67.3%[36] - A significant portion of debt investments (96% based on par amount) have Term Secured Overnight Financing Rate ("SOFR") floors ranging from 0.75% to 5.25%, with a weighted-average floor of 1.30%[79] - Debt investments are generally income-producing, while equity and warrants are non-income producing unless otherwise noted[79] Consolidated Schedule of Investments – December 31, 2024 This schedule details Main Street's investment portfolio as of December 31, 2024, categorized by control level and investment type Investment Portfolio Summary (in thousands) | Category | Cost | Fair Value | |:---|:---|:---| | Control Investments | $1,415,970 | $2,087,890 | | Affiliate Investments | $743,441 | $846,798 | | Non-Control/Non-Affiliate Investments | $2,077,901 | $1,997,981 | | Total Portfolio Company investments | $4,237,312 | $4,932,669 | | Money market funds | $6,474 | $6,474 | - Control investments constituted 74.6% of net assets at fair value, Affiliate investments 30.3%, and Non-Control/Non-Affiliate investments 71.4% as of December 31, 2024[99][100][135] - 95% of debt investments (based on par amount) had Term SOFR floors ranging from 0.50% to 5.25%, with a weighted-average floor of 1.32% as of December 31, 2024[138] Notes to Consolidated Financial Statements These notes provide essential context for Main Street's financial statements, detailing accounting policies, fair value, and debt NOTE A — ORGANIZATION AND BASIS OF PRESENTATION This note describes Main Street Capital Corporation's structure as an internally managed BDC and its tax treatment as a RIC - MSCC is an internally managed BDC, primarily focused on LMM and Private Loan investment strategies, providing customized long-term debt and equity capital solutions[143][403] - The company maintains a legacy portfolio of Middle Market investments and other portfolio investments, with Middle Market investments expected to decline[144][404] - MSCC has elected to be treated as a Regulated Investment Company (RIC) for U.S. federal income tax purposes, generally avoiding corporate-level taxes on distributed income[149][410] - The External Investment Manager, a wholly-owned subsidiary, provides services to external parties and is accounted for as a portfolio investment, not a consolidated subsidiary[148][154][409] NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note details Main Street's significant accounting policies, including fair value valuation, revenue recognition, and compensation - Main Street accounts for its Investment Portfolio at fair value, following ASC 820, with valuation processes approved by its Board of Directors[160][162][443] - Valuation methods include the Waterfall methodology for LMM equity, Yield-to-Maturity for LMM/Private Loan/Middle Market debt, and NAV for Other Portfolio equity investments[164][166][168][169] - External Financial Advisory Firms are consulted for fair value determinations of LMM and Private Loan portfolio companies, with 92% of LMM and 91% of Private Loan portfolios reviewed in the trailing twelve months ended June 30, 2025[170][173] - Investments on non-accrual status comprised 2.1% of the total Investment Portfolio at fair value and 5.0% at cost as of June 30, 2025[186][452] Investment Income Composition (in thousands) | Income Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Interest income | $100,857 | $100,031 | $198,874 | $200,136 | | Dividend income | $37,845 | $26,688 | $73,871 | $49,479 | | Fee income | $5,271 | $5,435 | $8,274 | $14,144 | | Total investment income | $143,973 | $132,154 | $281,019 | $263,759 | - PIK interest and cumulative dividends constituted 2.3% and 0.9% of total investment income, respectively, for the three months ended June 30, 2025, and 2.6% and 0.7% for the six months ended June 30, 2025[187][448] NOTE C — FAIR VALUE HIERARCHY FOR INVESTMENTS — PORTFOLIO COMPOSITION This note explains Main Street's fair value hierarchy for investments, detailing valuation inputs and providing a comprehensive breakdown of the portfolio's composition by type and industry - All LMM and Private Loan portfolio investments, and most Middle Market investments, are categorized as Level 3 due to reliance on unobservable inputs for fair value determination[220][221][223] - Key unobservable inputs for equity valuations include WACC (9.7% - 22.7% range, 14.5% weighted-average) and EBITDA multiples (5.0x - 9.0x range, 7.2x weighted-average)[226][227] - Key unobservable inputs for debt valuations include risk-adjusted discount rates (8.3% - 18.6% range, 12.3% weighted-average) and expected principal recovery percentages (0.0% - 500.0% range, 98.8% weighted-average)[226][227] Investment Portfolio Composition by Type (at cost) | Investment Type | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | First lien debt | 81.5 % | 82.9 % | | Equity | 17.9 % | 16.4 % | | Second lien debt | 0.1 % | 0.2 % | | Equity warrants | 0.3 % | 0.3 % | | Other | 0.2 % | 0.2 % | | Total | 100.0 % | 100.0 % | Investment Portfolio Composition by Type (at fair value) | Investment Type | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | First lien debt | 70.5 % | 71.4 % | | Equity | 28.7 % | 27.8 % | | Second lien debt | 0.1 % | 0.2 % | | Equity warrants | 0.5 % | 0.4 % | | Other | 0.2 % | 0.2 % | | Total | 100.0 % | 100.0 % | - The LMM portfolio had 88 companies with an average EBITDA of $10.4 million and a weighted-average annual effective yield of 12.8% (12.1% including non-accrual)[248][249] - The Private Loan portfolio had 87 companies with an average EBITDA of $32.5 million and a weighted-average annual effective yield of 11.4% (10.0% including non-accrual)[248][249] - Middle Market investments decreased from 15 companies ($155.3 million fair value) to 12 companies ($108.7 million fair value) from December 31, 2024, to June 30, 2025[252][437] - The investment in the External Investment Manager had a fair value of $272.6 million (5.4% of total portfolio) as of June 30, 2025, up from $246.0 million (5.0%) at December 31, 2024[254][440] NOTE D — EXTERNAL INVESTMENT MANAGER This note describes the operations and financial contribution of Main Street's External Investment Manager - The External Investment Manager provides investment advisory and administrative services to external clients, including MSC Income Fund, Private Loan Fund I, and Private Loan Fund II[268][269] - The External Investment Manager's total contribution to Main Street's net investment income was $8.7 million for the three months ended June 30, 2025 (down from $9.2 million in 2024), and $16.6 million for the six months ended June 30, 2025 (down from $17.8 million in 2024)[272][428] External Investment Manager Summarized Financial Information (in thousands) | Metric | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Accounts receivable - advisory clients | $10,688 | $10,183 | | Intangible asset | $29,500 | $29,500 | | Total assets | $40,188 | $39,683 | | Accounts payable to MSCC and its subsidiaries | $7,839 | $7,785 | | Dividend payable to MSCC and its subsidiaries | $2,849 | $2,398 | | Equity | $29,500 | $29,500 | | Total liabilities and equity | $40,188 | $39,683 | External Investment Manager Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Total revenues | $9,600 | $10,162 | $18,216 | $19,901 | | Total expenses | $(5,903) | $(5,902) | $(11,277) | $(11,470) | | Net income | $2,849 | $3,312 | $5,343 | $6,313 | NOTE E — DEBT This note summarizes Main Street's debt obligations, including Credit Facilities and unsecured notes, with details on rates and amendments Summary of Debt (in thousands) | Debt Instrument | June 30, 2025 Outstanding Balance | December 31, 2024 Outstanding Balance | |:---|:---|:---| | Corporate Facility | $301,000 | $208,000 | | SPV Facility | $176,000 | $176,000 | | July 2026 Notes | $500,000 | $500,000 | | June 2027 Notes | $400,000 | $400,000 | | March 2029 Notes | $350,000 | $350,000 | | SBIC debentures | $350,000 | $350,000 | | December 2025 Notes | $150,000 | $150,000 | | Total Debt | $2,227,000 | $2,134,000 | Summarized Interest Expense (in thousands) | Debt Instrument | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Corporate Facility | $5,867 | $7,240 | $10,324 | $11,522 | | SPV Facility | $3,771 | $3,096 | $7,587 | $4,774 | | July 2026 Notes | $3,882 | $3,882 | $7,763 | $7,763 | | June 2027 Notes | $6,572 | $1,473 | $13,144 | $1,473 | | March 2029 Notes | $6,261 | $6,261 | $12,522 | $11,747 | | SBIC debentures | $3,135 | $2,273 | $6,286 | $4,979 | | December 2025 Notes | $3,031 | $3,031 | $6,061 | $6,061 | | May 2024 Notes | $0 | $1,905 | $0 | $7,618 | | Total Interest Expense | $32,519 | $29,161 | $63,687 | $55,937 | - Corporate Facility commitments increased to $1.145 billion, with an accordion feature up to $1.718 billion, and maturity extended to April 2030, with interest rate decreased to SOFR + 0.10% + 1.775% (or 1.65%)[284][285][286][497] - SPV Facility revolving period extended to September 2028 and final maturity to September 2030, with interest rate decreased to SOFR + 1.95% (during revolving period)[288][289][498] - Weighted-average effective interest rate on total borrowings was 5.8% for the three and six months ended June 30, 2025, compared to 5.8% and 5.6% for the corresponding periods in 2024[282] NOTE F — FINANCIAL HIGHLIGHTS This note presents Main Street's key financial highlights, including per share data, NAV ratios, and investment returns Per Share Data | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---| | NAV as of the beginning of the period | $31.65 | $29.20 | | Net investment income | $1.96 | $1.99 | | Net realized gain (loss) | $0.26 | $(0.10) | | Net unrealized appreciation | $0.49 | $0.74 | | Net increase in net assets resulting from operations | $2.68 | $2.45 | | Dividends paid | $(2.10) | $(2.04) | | NAV as of the end of the period | $32.30 | $29.80 | | Market value as of the end of the period | $59.10 | $50.49 | | Shares outstanding as of the end of the period | 89,282,595 | 86,552,506 | Ratios to Average NAV | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---| | Ratio of total expenses, including income tax expense, to average NAV | 3.86 % | 4.31 % | | Ratio of operating expenses to average NAV | 3.45 % | 3.43 % | | Ratio of net investment income to average NAV | 6.13 % | 6.75 % | | Portfolio turnover ratio | 11.40 % | 8.62 % | | Total investment return | 4.67 % | 21.97 % | | Total return based on change in NAV | 8.53 % | 8.47 % | - Net increase in net assets resulting from operations per share increased to $2.68 for the six months ended June 30, 2025, from $2.45 in the prior year[309] - Total investment return was 4.67% for the six months ended June 30, 2025, compared to 21.97% in the prior year, while total return based on change in NAV remained strong at 8.53% (2025) vs. 8.47% (2024)[316] NOTE G — DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME This note details Main Street's dividend policy, RIC tax treatment, and reconciliation of net assets to taxable income Summarized Dividend Information | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Regular monthly dividends per share | $0.75 | $0.72 | $1.50 | $1.44 | | Supplemental quarterly dividends per share | $0.30 | $0.30 | $0.60 | $0.60 | | Total dividends per share | $1.05 | $1.02 | $2.10 | $2.04 | | Total dividends paid (in thousands) | $93,726 | $87,954 | $186,873 | $174,789 | - Main Street declared total dividends of $1.05 per share for the three months ended June 30, 2025, and $2.10 per share for the six months ended June 30, 2025[319] Reconciliation of Net Increase in Net Assets to Taxable Income (in thousands) | Metric | Six Months Ended June 30, 2025 (estimated) | Six Months Ended June 30, 2024 (estimated) | |:---|:---|:---| | Net increase in net assets resulting from operations | $238,616 | $209,835 | | Estimated taxable income | $157,812 | $153,911 | | Total distributions accrued or paid to common stockholders | $187,571 | $175,625 | Income Tax Provision (in thousands) | Tax Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Total net investment income tax provision | $5,151 | $3,401 | $9,064 | $6,776 | | Total investment valuation related income tax provision (benefit) | $(882) | $7,669 | $2,578 | $15,234 | | Total income tax provision | $4,269 | $11,070 | $11,642 | $22,010 | NOTE H — COMMON STOCK This note describes Main Street's At-The-Market (ATM) Program for common stock sales and remaining share availability - Main Street sold 280,730 shares of common stock under its ATM Program for $16.1 million in gross proceeds during the six months ended June 30, 2025[328][506] - New distribution agreements in March 2025 allow for the sale of up to 20,000,000 shares through the ATM Program, with 19,790,632 shares remaining available as of June 30, 2025[328][506] NOTE I — DIVIDEND REINVESTMENT PLAN This note outlines Main Street's Dividend Reinvestment Plan (DRIP), detailing participation and shares issued DRIP Information (in thousands, except shares) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---| | DRIP participation | $18,466 | $17,229 | | Shares issued for DRIP | 324,454 | 366,496 | - DRIP participation for the six months ended June 30, 2025, was $18,466 thousand, leading to the issuance of 324,454 shares[331] NOTE J — SHARE-BASED COMPENSATION This note details Main Street's share-based compensation plans, including restricted stock awards and unrecognized expense - Total share-based compensation expense was $10.3 million for the six months ended June 30, 2025, an increase from $9.0 million in the prior year[335] - As of June 30, 2025, there was $46.0 million of total unrecognized compensation expense related to non-vested restricted shares, expected to be recognized over a weighted-average period of 2.8 years[339] Restricted Stock Awards (RSAs) Activity (shares) | Metric | Six Months Ended June 30, 2025 | |:---|:---| | Non-vested, December 31, 2024 | 1,039,417 | | Granted | 455,810 | | Vested | (455,608) | | Forfeited | (13,231) | | Non-vested, June 30, 2025 | 1,026,388 | | Restricted stock available for issuance (Equity and Incentive Plan) | 3,511,962 | | Restricted stock available for issuance (Non-Employee Director Plan) | 285,545 | NOTE K — COMMITMENTS AND CONTINGENCIES This note outlines Main Street's outstanding commitments and confirms no material impact from current legal proceedings - Total outstanding commitments were $307.5 million as of June 30, 2025, comprising $28.9 million in equity capital commitments and $278.6 million in loan commitments[340][342][516] - The largest loan commitments include Mission Critical Group ($39.0 million), ZRG Partners, LLC ($20.8 million), and TEC Services, LLC ($16.2 million)[340][342] - Main Street expects to fund unfunded commitments through existing cash, operating cash flows, and available borrowings under Credit Facilities[344][508] - The company does not expect any current legal proceedings to materially affect its financial condition or results of operations[345][534] NOTE L — RELATED PARTY TRANSACTIONS This note describes Main Street's transactions and agreements with related parties, including investment activities and compensation - Main Street had a $10.7 million receivable from the External Investment Manager as of June 30, 2025, including operating expenses and declared but unpaid dividends[347] - Main Street has a share purchase plan to buy up to $20.0 million of MSC Income common stock in the open market when its price is below NAV, with $19.955 million remaining available as of June 30, 2025[349][351] - Main Street committed $15.0 million to Private Loan Fund I, with $14.2 million funded and $0.8 million unfunded as of June 30, 2025, and provided a $15.0 million revolving line of credit to the fund, with $4.0 million outstanding[353][354] - Main Street committed $15.0 million to Private Loan Fund II, with $9.0 million funded and $6.0 million unfunded as of June 30, 2025[355] - As of June 30, 2025, $30.1 million was deferred under the Deferred Compensation Plan, with $11.4 million in phantom Main Street stock units and $18.7 million in funded investments in trust, including $2.1 million in Private Loan Fund I and $4.5 million in Private Loan Fund II[358] NOTE M — SUBSEQUENT EVENTS This note reports subsequent events, including the declaration of supplemental and regular monthly dividends for 2025 - Main Street declared a supplemental dividend of $0.30 per share payable in September 2025[359][522] - Regular monthly dividends of $0.255 per share were declared for October, November, and December 2025, totaling $0.765 per share for Q4 2025, a 4.1% increase from Q4 2024[360][523] - Cumulative dividends paid since the October 2007 IPO will reach $46.855 per share, including Q3 and Q4 2025 declarations[360][523] Consolidated Schedules of Investments in and Advances to Affiliates These schedules detail Main Street's investments in and advances to affiliates for the six months ended June 30, 2025, and 2024 - Total Control investments as of June 30, 2025, were $2,295,565 thousand, with net realized gain of $(2,976) thousand and net unrealized appreciation of $33,555 thousand for the six months[379] - Total Affiliate investments as of June 30, 2025, were $856,226 thousand, with net realized gain of $57,711 thousand and net unrealized depreciation of $(8,742) thousand for the six months[379] - Geographically, Control investments were concentrated in the Southwest region ($990,024 thousand fair value) and Midwest region ($586,104 thousand fair value) as of June 30, 2025[379] - Affiliate investments were primarily in the Southeast region ($202,564 thousand fair value) and Southwest region ($224,323 thousand fair value) as of June 30, 2025[379] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Main Street's financial condition, operating results, investment strategies, and liquidity for the three and six months ended June 30, 2025 - Main Street's LMM investment strategy targets companies with annual revenues between $10 million and $150 million and EBITDA between $3 million and $20 million[413] - The Private Loan investment strategy focuses on companies with annual revenues between $25 million and $500 million and EBITDA between $7.5 million and $50 million[413] - The company's internally managed structure provides a beneficial operating expense structure, with total operating expenses (excluding interest) as a percentage of quarterly average total assets at 1.3% for the trailing twelve months ended June 30, 2025[423] Comparison of Results of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Total investment income | $143,973 | $132,154 | $281,019 | $263,759 | | Total expenses | $(50,639) | $(44,854) | $(97,875) | $(86,653) | | Net investment income | $88,183 | $83,899 | $174,080 | $170,330 | | Net realized gain (loss) | $52,420 | $3,414 | $22,875 | $(8,954) | | Net unrealized appreciation (depreciation) | $(18,951) | $23,044 | $44,239 | $63,693 | | Net increase in net assets from operations | $122,534 | $102,688 | $238,616 | $209,835 | | Distributable net investment income | $94,344 | $88,885 | $185,263 | $179,881 | - Net cash provided by operating activities was $82.1 million for the six months ended June 30, 2025, a significant improvement from a net use of $304.5 million in the prior year[493] - As of June 30, 2025, Main Street had $87.0 million in cash and cash equivalents and $1.264 billion of unused capacity under its Credit Facilities[495] - The BDC asset coverage ratio was 253% as of June 30, 2025, well above the 150% regulatory requirement[512] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section details Main Street's exposure to financial market risks, particularly interest rate fluctuations, and provides a sensitivity analysis of net investment income - Main Street is subject to financial market risks, particularly changes in interest rates (SOFR and Prime rates), affecting both investment income and debt expense[525] - As of June 30, 2025, 66% of the debt Investment Portfolio (at cost) bore floating interest rates, with 96% of these subject to contractual minimums[526] - As of June 30, 2025, 79% of debt obligations bore fixed interest rates[526] - The company has not entered into any interest rate hedging arrangements[526] Sensitivity of Annualized Net Investment Income to Hypothetical Base Rate Changes (in thousands, except per share amounts) | Basis Point Change | Increase (Decrease) in Interest Income | (Increase) Decrease in Interest Expense | Increase (Decrease) in Net Investment Income from the External Investment Manager | Increase (Decrease) in Net Investment Income | Increase (Decrease) in Net Investment Income per Share | |:---|:---|:---|:---|:---|:---| | (200) | $(42,342) | $9,540 | $(855) | $(33,657) | $(0.38) | | (100) | $(20,823) | $4,770 | $(384) | $(16,437) | $(0.18) | | 100 | $20,590 | $(4,770) | $665 | $16,485 | $0.18 | | 200 | $41,199 | $(9,540) | $1,119 | $32,778 | $0.37 | Item 4. Controls and Procedures Management confirms the effectiveness of disclosure controls and procedures as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[531] - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[531] PART II OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and exhibits, providing additional context Item 1. Legal Proceedings The company does not anticipate any current legal proceedings to materially impact its financial condition or results of operations - The company does not expect any current legal proceedings to materially affect its financial condition or results of operations[534] Item 1A. Risk Factors This section refers to previously disclosed risk factors, confirming no material changes since the last annual and quarterly reports - No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for December 31, 2024, and the Quarterly Report on Form 10-Q for March 31, 2025[537] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Main Street issued common stock through its dividend reinvestment plan and may withhold shares for employee tax purposes during the quarter - 167,705 shares of common stock were issued under the dividend reinvestment plan during the three months ended June 30, 2025, with an aggregate value of $9.4 million[538] - Shares may be withheld upon vesting of restricted stock for employee payroll tax withholding, treated as common stock purchases by the company[539] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans or other trading arrangements during the quarter ended June 30, 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[540] Item 6. Exhibits This section lists all exhibits filed with the report, including credit agreement amendments, officer certifications, and iXBRL financial information - Exhibits include the Seventh Amendment to Third Amended and Restated Credit Agreement (April 30, 2025) and the Third Amendment to Credit Agreement (April 24, 2025)[541] - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002 are filed/furnished[541] - Financial information from the Quarterly Report is provided in Inline Extensible Business Reporting Language (iXBRL) format[541] Signatures This section contains the required signatures of Main Street Capital Corporation's authorized officers, certifying the report's submission - The report is signed by Dwayne L. Hyzak (Chief Executive Officer), Ryan R. Nelson (Chief Financial Officer), and Ryan H. McHugh (Chief Accounting Officer) on August 8, 2025[546]