Hercules Capital(HTGC) - 2025 Q4 - Annual Results

Financial Performance - Record full-year 2025 total new debt and equity commitments reached $3.92 billion, an increase of 45.7% year-over-year[1] - Full-year 2025 total fundings amounted to $2.28 billion, reflecting a 25.9% increase year-over-year[1] - Full-year 2025 total investment income was $532.5 million, up 7.9% year-over-year[1] - Full-year 2025 net investment income (NII) was $341.7 million, or $1.91 per share, an increase of 4.9% year-over-year[1] - Q4 2025 total gross debt and equity commitments were $1.06 billion, a 70.8% increase year-over-year[2] - Q4 2025 NII was $87.0 million, or $0.48 per share, providing 120% coverage of the base cash distribution[1] - Total investment income for Q4 2025 was $137.43 million, up from $121.78 million in Q4 2024, representing a 12.8% increase[61] - Core investment income from debt portfolio for Q4 2025 was $130.43 million, compared to $111.47 million in Q4 2024, reflecting a 17.0% growth[62] - The net investment income for the twelve months ended December 31, 2025, was $341.72 million, compared to $325.83 million for the previous year, indicating a 4.9% increase[61] Assets and Liabilities - Approximately $5.7 billion of assets under management, an increase of 20.5% year-over-year[1] - The company's total assets increased to $4,584.0 million as of December 31, 2025, compared to $3,831.6 million as of December 31, 2024, reflecting a growth of approximately 19.6%[59] - Total liabilities rose to $2,368.0 million as of December 31, 2025, up from $1,842.0 million in the previous year, marking an increase of about 28.6%[59] - The Company ended Q4 2025 with $525.5 million in available liquidity, including $57.0 million in unrestricted cash[28] - As of December 31, 2025, the Company had $385.6 million of available unfunded commitments, representing 8.4% of total assets, down from $437.5 million or 9.9% in the previous quarter[34] Investment Activities - Hercules held equity positions in 74 portfolio companies with a fair value of $139.0 million as of December 31, 2025[43] - Hercules committed $20.0 million in venture debt financing to Carbyne, Inc., which is being acquired for $625.0 million[45] - Hercules committed $150.0 million in venture debt financing to Armis, Inc., which is being acquired for $7.75 billion[45] - The company committed $40.0 million in venture debt financing to Dynavax Technologies Corporation, which is set to be acquired by Sanofi for approximately $2.2 billion[49] - Hercules' portfolio company SirionLabs announced a majority investment from Haveli Investments, enhancing its market position in contract lifecycle management software[49] Leverage and Ratios - Net leverage stood at 101.8% and net regulatory leverage at 86.0%[6] - Hercules' GAAP leverage ratio, including its SBA debentures, was 104.4% as of December 31, 2025[32] - The net leverage ratio as of December 31, 2025, was 101.8%, down from 104.4% on a GAAP basis[64] - The regulatory leverage ratio was reported at 86.0% on a non-GAAP basis as of December 31, 2025, compared to 88.6% on a GAAP basis[65] Expenses - Total gross operating expenses for the twelve months ended December 31, 2025, were $206.02 million, an increase from $178.54 million in 2024, representing a 15.4% rise[61] - Employee compensation expenses for Q4 2025 totaled $19.93 million, up from $14.49 million in Q4 2024, marking a 37.8% increase[61] - Total net operating expenses for the twelve months ended December 31, 2025, were $190.77 million, compared to $167.76 million in 2024, reflecting a 13.7% increase[61] Shareholder Returns - Announced a new supplemental cash distribution for 2026 of $0.28 per share, payable over four quarters[1] - Distributions paid per common share for the twelve months ended December 31, 2025, were $1.88, slightly down from $1.92 in 2024[61] - Hercules Capital's net asset value per share increased to $12.13 as of December 31, 2025, compared to $11.66 a year earlier, representing a growth of approximately 4.0%[59] Company Overview - Hercules Capital has committed over $25 billion to more than 700 companies since its inception in December 2003, establishing itself as a leading lender in the venture capital space[52] - The company plans to host its fourth quarter and full-year 2025 financial results conference call on February 12, 2026[51] - Hercules Capital's common stock trades on the NYSE under the ticker symbol "HTGC" and has one retail bond issuance of 6.25% Notes due 2033[54]