MidCap Financial Investment (MFIC) - 2026 Q1 - Quarterly Results

Executive Summary & Recent Highlights Q2 2025 Financial Performance Overview MidCap Financial Investment Corporation reported a net investment income of $0.39 per share for Q2 2025, an increase from the previous quarter, while net asset value per share saw a slight decrease. The Board declared a dividend of $0.38 per share Key Financial Metrics (Per Share) | Metric | Q2 2025 (June 30, 2025) | Q1 2025 (March 31, 2025) | Change | | :------------------------ | :---------------------- | :--------------------- | :----- | | Net Investment Income per share | $0.39 | $0.37 | +$0.02 | | Net Asset Value (NAV) per share | $14.75 | $14.93 | -$0.18 (-1.2%) | - The Board declared a dividend of $0.38 per share payable on September 25, 2025, to stockholders of record as of September 9, 2025[2] Key Operational and Strategic Highlights The company made significant new investment commitments and fundings during the quarter, maintained its credit rating, and appointed a new CFO. A notable post-quarter event includes an expected substantial repayment from Merx Aviation Finance, reducing portfolio exposure - New investment commitments made during the quarter totaled $262 million[2] - Gross fundings, excluding revolver fundings, totaled $254 million for the quarter[2] - Net fundings, including revolvers, totaled $144 million for the quarter[2] - Net leverage was 1.44x as of June 30, 2025[2] - KBRA affirmed MFIC's BBB- rating and maintained its Positive Outlook in June[2] - Kenneth Seifert was appointed Chief Financial Officer and Treasurer, effective June 30, 2025[2] - The Company expects to receive a net repayment of approximately $90 million from Merx Aviation Finance, LLC, during the September quarter, reducing its exposure to approximately 2.8% of the total portfolio, at fair value[2][3] CEO Commentary CEO Tanner Powell highlighted continued disciplined capital deployment into MidCap Financial-sourced assets despite a competitive environment. He noted that NAV declined due to challenges faced by a few companies but expressed optimism regarding the expected significant repayment from Merx Aviation Finance, anticipating accretive earnings from capital redeployment - The Company continued to deploy capital into assets sourced by MidCap Financial, maintaining disciplined underwriting despite a competitive environment[3] - NAV declined due to challenges faced by a handful of companies[3] - Merx Aviation Finance successfully completed a sale transaction and received additional payments from insurers, expected to lead to a post-quarter net repayment of approximately $90 million to MFIC, reducing the investment in Merx by nearly half[3] - The redeployment of capital from Merx is expected to be accretive to earnings going forward[3] Financial Performance Analysis Consolidated Financial Highlights The company's total assets and investment portfolio increased from March 31, 2025, to June 30, 2025, while net asset value per share slightly decreased. Debt and leverage ratios also saw an increase over the quarter Financial Highlights (in billions, except per share data) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total assets | $3.46 | $3.36 | $3.19 | $3.22 | $2.55 | | Investment portfolio (fair value) | $3.33 | $3.19 | $3.01 | $3.03 | $2.44 | | Debt outstanding | $2.05 | $1.94 | $1.75 | $1.77 | $1.51 | | Net assets | $1.38 | $1.39 | $1.40 | $1.42 | $1.00 | | Net asset value per share | $14.75 | $14.93 | $14.98 | $15.10 | $15.38 | | Debt-to-equity ratio | 1.49 x | 1.39 x | 1.25 x | 1.25 x | 1.51 x | | Net leverage ratio | 1.44 x | 1.31 x | 1.16 x | 1.16 x | 1.45 x | Operating Results For the three months ended June 30, 2025, Net Investment Income increased year-over-year, but the company experienced a significant increase in net realized and unrealized losses, leading to a decrease in net assets resulting from operations and basic earnings per share compared to the prior year Consolidated Operating Results (in millions, except per share data) | 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 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net investment income | $36.4 | $29.5 | $70.7 | $58.1 | | Net realized and change in unrealized gains (losses) | $(18.3) | $(7.0) | $(22.2) | $(10.0) | | Net increase in net assets resulting from operations | $18.1 | $22.6 | $48.4 | $48.0 | | Net investment income on per average share basis | $0.39 | $0.45 | $0.76 | $0.89 | | Net realized and change in unrealized gain (loss) per share | $(0.20) | $(0.11) | $(0.24) | $(0.15) | | Earnings per share — basic | $0.19 | $0.35 | $0.52 | $0.74 | Investment Income Breakdown Total investment income for the three months ended June 30, 2025, increased to $81.2 million from $69.2 million in the prior year, primarily driven by higher interest income from non-controlled/non-affiliated investments Investment Income (in thousands) | Category | 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 (excl. PIK) - Non-controlled/non-affiliated | $70,230 | $60,146 | $138,301 | $120,142 | | PIK interest income - Non-controlled/non-affiliated | $4,770 | $2,438 | $9,171 | $4,433 | | Total Investment Income | $81,247 | $69,156 | $159,945 | $137,486 | Expenses Analysis Total expenses for the three months ended June 30, 2025, increased to $45.1 million from $39.9 million in the prior year, mainly due to higher interest and other debt expenses, partially offset by lower performance-based incentive fees Expenses (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Management fees | $6,079 | $4,389 | $12,140 | $8,775 | | Performance-based incentive fees | $3,849 | $5,572 | $10,282 | $11,610 | | Interest and other debt expenses | $32,581 | $26,992 | $63,044 | $53,170 | | Total expenses | $45,130 | $39,882 | $90,351 | $79,836 | Net Investment Income Net investment income for the three months ended June 30, 2025, was $36.4 million, an increase of 23.4% compared to $29.5 million for the same period in 2024 - Net Investment Income for the three months ended June 30, 2025, was $36,397 thousand, up from $29,541 thousand in the prior year[22] - Net Investment Income for the six months ended June 30, 2025, was $70,680 thousand, compared to $58,084 thousand in the prior year[22] Net Realized and Unrealized Gains (Losses) The company reported a net realized and change in unrealized losses of $18.3 million for the three months ended June 30, 2025, significantly higher than the $7.0 million loss in the prior year, primarily driven by increased net realized losses from non-controlled/non-affiliated investments and foreign currency transactions - Net realized losses for the three months ended June 30, 2025, totaled $(17,238) thousand, compared to $(15,638) thousand in the prior year[22] - Net change in unrealized losses for the three months ended June 30, 2025, was $(1,044) thousand, a decrease from a gain of $8,652 thousand in the prior year[22] - Total Net Realized and Change in Unrealized Gains (Losses) for the three months ended June 30, 2025, was $(18,282) thousand, compared to $(6,986) thousand in the prior year[22] Earnings Per Share Basic earnings per share for the three months ended June 30, 2025, decreased to $0.19 from $0.35 in the prior year, reflecting the impact of increased net realized and unrealized losses despite higher net investment income - Basic Earnings Per Share for the three months ended June 30, 2025, was $0.19, down from $0.35 in the same period of 2024[22] - Basic Earnings Per Share for the six months ended June 30, 2025, was $0.52, down from $0.74 in the same period of 2024[22] Portfolio and Investment Activity Investment Activity Summary Net investment activity for the three months ended June 30, 2025, was $144.0 million, a substantial increase from $90.5 million in the prior year, driven by higher investments made in portfolio companies. The number of portfolio companies increased to 249 Portfolio and Investment Activity (in millions) | 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 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Investments made in portfolio companies | $288.7 | $245.4 | $680.6 | $398.2 | | Investments sold | $(14.9) | — | $(58.9) | — | | Investments repaid | $(129.9) | $(154.9) | $(307.4) | $(291.7) | | Net investment activity | $144.0 | $90.5 | $314.4 | $106.4 | | Portfolio companies at end of period | 249 | 165 | 249 | 165 | | Number of investments in new portfolio companies | 14 | 18 | 34 | 25 | Portfolio Composition and Yields As of June 30, 2025, the portfolio primarily consisted of first lien secured debt (93%), with a weighted average yield of 10.4% for total secured debt. The vast majority (99%) of the portfolio's interest rate type is floating rate Portfolio Composition and Weighted Average Yields | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | First lien secured debt (fair value) | 93% | 93% | 92% | 91% | 90% | | Second lien secured debt (fair value) | 0% | 0% | 1% | 1% | 1% | | Total secured debt (fair value) | 93% | 93% | 93% | 92% | 91% | | Weighted average yield (Total secured debt, amortized cost) | 10.4% | 10.5% | 10.8% | 11.1% | 11.9% | | Floating rate, as percentage of total (fair value) | 99% | 99% | 99% | 99% | 100% | Capital Structure and Liquidity Consolidated Statements of Assets and Liabilities As of June 30, 2025, total assets increased to $3.46 billion from $3.19 billion at December 31, 2024, primarily driven by an increase in investments at fair value. Total liabilities also increased, mainly due to higher debt outstanding Consolidated Statements of Assets and Liabilities (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------------------------- | :------------------------ | :---------------- | | Total Assets | $3,461,883 | $3,190,950 | | Investments at fair value (Non-controlled/non-affiliated) | $2,896,424 | $2,605,329 | | Debt | $2,051,654 | $1,751,621 | | Total Liabilities | $2,085,962 | $1,786,304 | | Net Assets | $1,375,921 | $1,404,646 | | Net Asset Value Per Share | $14.75 | $14.98 | Debt and Liquidity Profile The company's total outstanding debt obligations were $2,058 million as of June 30, 2025, composed of various senior unsecured notes, CLO notes, and a senior secured facility. The company had $409 million in available capacity under its Senior Secured Facility - Total outstanding debt obligations, excluding deferred financing cost and debt discount, totaled $2,058 million as of June 30, 2025[13] - Debt was comprised of $125 million Senior Unsecured Notes (due July 16, 2026), $80 million Senior Unsecured Notes (due December 15, 2028), $232 million Class A-1 Notes in MFIC Bethesda CLO 1 LLC, $399 million secured debt in MFIC Bethesda CLO 2 LLC, and $1,222 million outstanding under the Senior Secured Facility[13] - Available remaining capacity under the Senior Secured Facility was $409 million as of June 30, 2025[13] Share Repurchase Program No shares were repurchased during the three months ended June 30, 2025. Since inception, the company has repurchased 16.1 million shares for $254.2 million, with $20.8 million remaining under the current authorization - No shares were repurchased during the three months ended June 30, 2025[11] - Since inception through August 8, 2025, the Company repurchased 16,069,776 shares at a weighted average price of $15.82 per share, for a total cost of $254.2 million[11] - A maximum of $20.8 million remains available for future purchases under the current Board authorization of $275 million[11] Corporate Information and Disclosures Conference Call and Webcast Details MidCap Financial Investment Corporation will host a conference call and webcast on August 12, 2025, to discuss its financial results, with replay options available - The Company will host a conference call on Tuesday, August 12, 2025, at 8:30 a.m. Eastern Time[15] - A simultaneous webcast will be available on the Company's website at www.midcapfinancialic.com, with telephonic and audio webcast replays also available[15] Supplemental Information The company offers a supplemental information package on its website to provide additional transparency and detail regarding its financial results - A supplemental information package is available in the Shareholders section of the Company's website under Presentations at www.midcapfinancialic.com[16](index=16&type=chunk) About MidCap Financial Investment Corporation MidCap Financial Investment Corporation is a closed-end, externally managed business development company (BDC) advised by an affiliate of Apollo Global Management. Its primary objective is to generate current income and long-term capital appreciation by investing mainly in directly originated first lien senior secured loans to U.S. middle-market companies - MidCap Financial Investment Corporation (NASDAQ: MFIC) is a closed-end, externally managed, diversified management investment company that has elected to be treated as a business development company (BDC) and a regulated investment company (RIC)[26] - The Company is externally managed by an Investment Adviser, an affiliate of Apollo Global Management, Inc[26] - Its investment objective is to generate current income and, to a lesser extent, long-term capital appreciation, primarily by investing in directly originated and privately negotiated first lien senior secured loans to privately held U.S. middle-market companies (generally defined as companies with less than $75 million in EBITDA)[26] Important Information and Forward-Looking Statements The report includes standard disclaimers advising investors to review the prospectus for risks, noting that the information is not an offer to sell securities, and emphasizing that past performance does not guarantee future results. It also contains forward-looking statements subject to various risks and uncertainties - Investors are advised to carefully consider the investment objective, risks, charges, and expenses of the Company before investing and to read the prospectus filed with the SEC[23] - This communication does not constitute an offer to sell or the solicitation of an offer to buy securities[24] - Past performance is not indicative of, or a guarantee of, future performance, and investment return and principal value will fluctuate[25] - The press release contains forward-looking statements that involve risks and uncertainties, and actual results could differ materially from projections due to various factors[27] Investor Relations Contact Contact information for investor relations is provided for inquiries - For investor relations inquiries, contact Elizabeth Besen, Investor Relations Manager, at 212.822.0625 or ebesen@apollo.com[29]