Financial and Operational Highlights This section covers corporate strategic shifts, key financial metrics, and the impact of the royalty portfolio sale on book value and net income Corporate Highlights & CEO Commentary In Q2 2025, SWK Holdings simplified its business by selling the majority of its royalty portfolio and the assets of its MOD3 subsidiary, enabling a focused strategy on its core life science loan business - Sold the majority of its royalty portfolio for approximately book value and paid a $4.00 per share special dividend to shareholders3 - Sold the majority of assets at its MOD3 subsidiary post-quarter end, simplifying the business to focus on the core life science loan strategy3 Post-Monetization Asset Portfolio | Asset Type | Gross Value (in millions) | | :--- | :--- | | Performing Finance Receivables | $234.1M | | Non-Performing Finance Receivables | $12.3M | | Public Equities & Warrants | $5.2M | | Allowance for Credit Losses | ($8.8M) | - GAAP book value per share was $20.23, a 6.8% increase year-over-year when excluding the $4.00 per share dividend. Non-GAAP tangible financing book value per share was $18.47, an 11.7% year-over-year increase after adjusting for the dividend3 Key Financial Metrics The company reported GAAP net income of $3.5 million, a slight decrease from the prior year, while finance receivables segment adjusted non-GAAP net income grew significantly to $4.6 million Q2 2025 vs Q2 2024 Key Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP Net Income | $3.5M | $3.7M | -5.4% | | Finance Receivables Segment Adj. Non-GAAP Net Income | $4.6M | $2.6M | +76.9% | | Net Finance Receivables | $237.6M | - | -10.4% (vs Jun 30, 2024) | | Effective Yield | 14.1% | 14.6% | -50 bps | | GAAP Book Value per Share | $20.23 | $22.72 | -11.0% | | Non-GAAP Tangible Financing Book Value per Share | $18.47 | $20.14 | -8.3% | - Adjusting for the $4.00 per share special dividend, GAAP book value per share would have increased 6.8% YoY, and non-GAAP tangible financing book value per share would have increased 11.7% YoY4 Detailed Financial Performance This section details the company's second quarter 2025 financial results, including revenue breakdown, profitability, investment asset changes, and portfolio activity Second Quarter 2025 Financial Results For Q2 2025, total revenue decreased by 6.5% to $10.1 million, primarily due to a $1.2 million drop in Finance Receivables segment revenue following the sale of the royalty portfolio Q2 2025 Revenue Breakdown | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Total Revenue | $10.1M | $10.8M | -6.5% | | Finance Receivables Segment Revenue | - | - | -$1.2M | | Pharmaceutical Development Segment Revenue | - | - | +$0.5M | Q2 2025 Profitability | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | | Income Before Income Tax | $4.6M | $4.7M | | GAAP Net Income | $3.5M | $3.7M | | Diluted EPS | $0.29 | $0.30 | - Total investment assets decreased by 8.9% to $242.8 million as of June 30, 2025, primarily due to the monetization of royalty assets for total proceeds of approximately $51.3 million8 - During Q2, SWK repurchased 58,954 shares for $0.9 million. Year-to-date through August 8, 2025, repurchases totaled 198,162 shares for $3.0 million9 Portfolio Status and Activity In Q2, SWK sold the majority of its royalty portfolio for $34.0 million and advanced $13.5 million to two existing borrowers - Key Q2 activities included selling the majority of the royalty portfolio for $34.0 million, paying a $49.1 million dividend, and funding an additional $13.5 million to performing borrowers AOTI, Inc. and Nicoya Life Sciences, Inc11 Portfolio Yields (Q2 2025 vs Q2 2024) | Yield Type | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Effective Yield | 14.1% | 14.6% | -50 bps | | Realized Yield | 14.3% | 15.4% | -110 bps | - As of June 30, 2025, three finance receivables were in nonaccrual status: Flowonix ($7.1M carrying value), Best ABT ($2.3M), and Ideal Implant ($2.8M)13 Q2 2025 Portfolio Investment Activity (in thousands) | Activity | Amount | | :--- | :--- | | Beginning Portfolio | $227,776 | | Investment in finance receivables | $13,500 | | Paydowns received on investments | ($466) | | Provision for credit losses | ($541) | | Ending Portfolio | $242,819 | Non-GAAP Financial Measures This section provides reconciliations of non-GAAP financial measures to their GAAP equivalents and explains their relevance for analyzing the company's core operations Reconciliation of Non-GAAP Measures The company provides reconciliations for several non-GAAP metrics to their GAAP counterparts Reconciliation of GAAP Net Income to Non-GAAP Net Income (in thousands) | | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP Net Income | $3,536 | $3,680 | | Adjustments | $1,093 | ($1,712) | | Non-GAAP Net Income | $4,629 | $1,968 | Finance Receivables Segment Adjusted Non-GAAP Net Income (in thousands) | | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Non-GAAP Net Income | $4,629 | $1,968 | | MOD3 operating (income) loss | ($18) | $670 | | Finance Receivables Segment Adjusted Non-GAAP Net Income | $4,611 | $2,638 | Reconciliation of GAAP Book Value to Non-GAAP Tangible Finance Book Value Per Share | | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | GAAP book value per share | $20.23 | $22.72 | | Non-GAAP Tangible book value per share | $18.47 | $20.14 | Explanation of Non-GAAP Measures SWK utilizes non-GAAP measures such as adjusted net income and tangible financing book value per share to provide investors with a clearer view of its core ongoing operations - Non-GAAP adjusted net income is adjusted for non-cash items such as changes in fair-market value of equities and warrants, income taxes (due to NOLs), amortization, and changes in contingent consideration20 - Non-GAAP finance receivable segment net income further excludes the operating results of the MOD3 subsidiary21 - Non-GAAP tangible financing book value per share is calculated by excluding the deferred tax asset, intangible assets, and contingent consideration related to the MOD3 transaction from GAAP book value21 Consolidated Financial Statements This section presents the condensed consolidated balance sheets, statements of income, and statements of cash flows, highlighting key financial positions and performance for the period Condensed Consolidated Balance Sheets As of June 30, 2025, SWK's total assets were $285.7 million, down from $332.2 million at year-end 2024, primarily due to a decrease in net finance receivables Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $285,697 | $332,235 | | Finance receivables, net | $237,604 | $277,760 | | Total Liabilities | $39,228 | $43,545 | | Total Stockholders' Equity | $246,469 | $288,690 | Condensed Consolidated Statements of Income For the three months ended June 30, 2025, total revenues were $10.1 million, a decrease from $10.8 million in the prior-year period Income Statement Summary - Three Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $10,052 | $10,847 | | Provision for credit losses | $761 | $4,095 | | Income before income tax expense | $4,562 | $4,715 | | Net Income | $3,536 | $3,680 | | Diluted EPS | $0.29 | $0.30 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities was $16.1 million Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,081 | $9,843 | | Net cash provided by investing activities | $42,841 | $4,813 | | Net cash used in financing activities | ($56,843) | ($14,343) | | Net increase in cash | $2,079 | $313 | - Key financing activities in the first six months of 2025 included paying $49.1 million in cash dividends and repurchasing $1.7 million of common stock31 Additional Information This section provides details on the upcoming conference call for Q2 2025 results and an overview of SWK Holdings Corporation's business model and financing solutions Conference Call Information SWK Holdings will host a conference call on August 15, 2025, at 9:00 a.m. CST to discuss the second quarter 2025 financial results - A conference call to discuss Q2 2025 results is scheduled for August 15, 2025, at 9:00 a.m. CST23 About SWK Holdings Corporation SWK Holdings Corporation is a specialty finance company focused on the life sciences sector - SWK is a life science-focused specialty finance company providing non-dilutive financing to small- and mid-sized commercial-stage healthcare companies24 - Financing solutions include structured debt, royalty monetization, and asset purchases, with typical transaction sizes ranging from $5.0 million to $25.0 million24
SWK Holdings(SWKH) - 2025 Q2 - Quarterly Results