AXIS Capital (AXS) Q1 2025 Earnings Call May 01, 2025 08:30 AM ET Company Participants Cliff Gallant - Head of Investor Relations & Corporate DevelopmentVincent Tizzio - President & CEOPeter Vogt - CFOAndrew Kligerman - Managing DirectorHristian Getsov - VP - Equity Research (Insurance)Meyer Shields - Managing DirectorAndrew Andersen - Equity Research Vice PresidentCharlie Lederer - Vice President - Equity Research Conference Call Participants Josh Shanker - Analyst Operator Please note this event is being ...

Financial Data and Key Metrics Changes - The company reported FFO per diluted share of $0.52 for Q1 2025, a decrease of approximately $0.03 compared to Q4 2024, primarily due to the impact of the Del Monte Center disposition [18][6] - Same store cash NOI increased by 3.1% year over year across all sectors, with positive growth reported in all sectors except mixed-use [18][19] - The company ended Q1 with liquidity of approximately $544 million, including $144 million in cash and $400 million available on a revolving line of credit [22] Business Line Data and Key Metrics Changes - The office portfolio's same store NOI increased by 5.4% in Q1 2025, driven by the expiration of a rent abatement [18][19] - The retail portfolio's same store NOI also increased by 5.4%, supported by new leases and contractual rent escalations [19] - The multifamily portfolio's NOI was flat year over year, primarily due to lower rental income in Portland, while San Diego properties showed growth [19][12] - The mixed-use portfolio's NOI declined by approximately 11.6%, mainly due to lower occupancy at the Embassy Suites Waikiki [19][20] Market Data and Key Metrics Changes - The office portfolio ended Q1 at 85.5% leased, with an increase in leasing activity and average base rents reaching an all-time high [9][11] - The retail portfolio ended the quarter 97% leased, with strong collections and an all-time high average base rent [11][12] - The multifamily properties in San Diego ended the quarter approximately 95% leased, with a blended rent increase of 2% [12][13] Company Strategy and Development Direction - The company is focused on thoughtful capital allocation, operational discipline, and enhancing asset quality to ensure long-term stability [5][6] - Recent strategic initiatives include the sale of Del Monte Center and the acquisition of Genesee Parks Apartments, aimed at concentrating capital in core markets [14][15] - The company aims to maintain a balance sheet that allows for flexibility in both offensive and defensive strategies [6][22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the ongoing shift in office dynamics, despite economic uncertainty [7][10] - The company remains focused on reducing leverage and maintaining strong liquidity, which is deemed essential in the current environment [6][22] - Management acknowledged potential challenges in leasing activity due to economic uncertainty but remains committed to monitoring market conditions closely [14][26] Other Important Information - The Board approved a quarterly dividend of $0.34 per share for Q2, reflecting confidence in the company's outlook [16][17] - The company aims to achieve and maintain a long-term net debt to EBITDA ratio of 5.5 times or below [22] Q&A Session Summary Question: Update on Bellevue assets and occupancy - Management noted significant leasing momentum in Bellevue, with recent leases bringing occupancy to 97% at Timber Ridge and ongoing interest in other properties [30][32] Question: Impact of Proposition 1A on tenant interest - Management observed increased inbound tenant inquiries in Bellevue, indicating a positive response to the proposition [34] Question: Plans for redeploying proceeds from Del Monte Center sale - The company is actively looking for additional acquisitions but is also comfortable holding cash on the balance sheet amid economic uncertainty [36][37] Question: Update on leasing pipeline at La Jolla - The UTC submarket remains tight, with ongoing proposals and construction of amenities expected to boost leasing activity [38][41]

Financial Data and Key Metrics Changes - The company reported GAAP net income per share of $0.56 for Q1 2025, down from $0.76 in Q1 2024 and $0.55 in the previous quarter [19] - Core earnings per share were $0.50, compared to $0.59 a year ago and $0.55 in the prior quarter, primarily due to a decline in portfolio yields [19][20] - The total portfolio at fair value increased to $27.1 billion from $26.7 billion in the previous quarter and $23.1 billion a year ago [21] Business Line Data and Key Metrics Changes - The company originated $3.5 billion in new investment commitments during Q1 2025, with approximately 60% coming from existing borrowers [26] - The weighted average yield on debt and other income-producing securities at amortized cost was 11.1% at the end of Q4 2024, down to 10.1% by the end of Q1 2025 [20] - The average debt to EBITDA ratio for portfolio companies was 5.7 times, the lowest since Q1 2020, indicating improved leverage [29] Market Data and Key Metrics Changes - New transaction activity in the liquid loan market dropped significantly as banks became more cautious, while the direct lending market remained stable [10][11] - The company noted increased volatility and widening spreads in secondary loan markets, with banks transitioning to a risk-off position [10][11] - The company has a significant amount of available capital totaling nearly $6.8 billion, positioning it well for new investments [14] Company Strategy and Development Direction - The company aims to capitalize on opportunities arising from market volatility, leveraging long-standing relationships to source deals [12][13] - The focus remains on service-oriented businesses that are more insulated from tariff impacts, with proactive engagement with portfolio companies to mitigate risks [15][17] - The company declared a quarterly dividend of $0.48 per share, marking the 63rd consecutive quarter of stable or increasing dividends [17][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating future market conditions, citing a strong investment team and a healthy portfolio [12][13] - The company anticipates a slower M&A environment but believes long-term drivers for M&A remain intact [11] - Management highlighted the importance of proactive communication with market participants to ensure readiness for new opportunities [12] Other Important Information - The company has a low non-accrual rate of 1.5% at cost, down from 1.7% in the previous quarter, indicating strong credit quality [29] - The company has a significant taxable income spillover estimated at $883 million or $1.29 per share available for distribution in 2025 [24] Q&A Session Summary Question: Impact of private BDCs on pricing and competitive position - Management noted that spreads have already begun to widen, indicating a shift in the market dynamics, and expressed confidence in outperforming competitors [35][36] Question: Analysis of tariff exposure - Management conducted a thorough analysis of portfolio companies' exposure to tariffs, finding a mid-single-digit percentage of companies potentially impacted [39][41] Question: Outlook on M&A deal volume - Management acknowledged the slowdown in M&A activity but emphasized their ability to capture market share in the current environment [45][47] Question: Strategies for managing rising costs of liabilities - Management highlighted their historical ability to maintain consistent ROE and mentioned potential strategies such as leveraging and utilizing spillover income [51][54] Question: Backlog and deal closure uncertainty - Management indicated that while there may be some uncertainty regarding the backlog due to market volatility, they remain optimistic about closing existing deals [75][77]

Financial Data and Key Metrics Changes - The company reported GAAP net income per share of $0.60 for Q1 2025, down from $0.76 in Q1 2024 and $0.55 in the previous quarter [19] - Core earnings per share were $0.50, compared to $0.59 a year ago and $0.55 in the prior quarter, primarily due to a decline in portfolio yields [19][20] - The total portfolio at fair value increased to $27.1 billion from $26.7 billion in the previous quarter and $23.1 billion a year ago [21] Business Line Data and Key Metrics Changes - The company committed $3.5 billion in gross commitments during the first quarter, a 54% increase compared to the same period last year [9][10] - The weighted average yield on debt and other income-producing securities at amortized cost was 11.1% at the end of Q4 2024, down to 10.1% by the end of Q1 2025 [20] - The portfolio companies reported a 12% weighted average LTM EBITDA growth, up from 11% in the prior quarter [28] Market Data and Key Metrics Changes - New transaction activity in the liquid loan market dropped significantly as banks became more cautious, leading to increased volatility and widening spreads in secondary loan markets [10][11] - The direct lending market remained stable, with certain transactions shifting from the syndicated loan market to private credit solutions [11] Company Strategy and Development Direction - The company aims to leverage its strong liquidity and conservative balance sheet leverage to capitalize on potential investment opportunities in a potentially improving spread environment [10][14] - The focus remains on domestic service-oriented businesses, which are believed to be more insulated from the impacts of higher tariffs [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate future market conditions, citing a seasoned investment team and strong relationships in the market [12][13] - The company declared a quarterly dividend of $0.48 per share, marking the 63rd consecutive quarter of stable or increasing dividends [17][24] Other Important Information - The company has nearly $6.8 billion in total available liquidity, positioning it well for future investments [22] - The non-accrual rate at cost ended the quarter at 1.5%, down from the previous quarter, indicating strong portfolio health [29] Q&A Session Summary Question: Will private credit provide similar or lower pricing than banks? - Management noted that spreads have already started to widen, indicating a shift in the market dynamics [35][36] Question: What is the exposure to tariffs for portfolio companies? - The company conducted a thorough analysis and found a mid-single-digit exposure to companies importing from high-tariff countries, emphasizing that this is an exposure analysis, not an impact analysis [39][41] Question: How does the company plan to manage earnings against rising costs of liabilities? - Management highlighted the ability to adjust leverage and utilize spillover income to manage costs effectively [50][54] Question: Is there a trend in portfolio stress or sectors experiencing issues? - Management indicated that there are no significant trends observed in portfolio stress at this time [102] Question: What is the outlook for new investment opportunities? - Management expressed optimism about the potential for larger deals in the private credit market, indicating a readiness to pivot as market conditions change [84][85]

Skyward Specialty Insurance Group, Inc. (NASDAQ:SKWD) Q4 2024 Results Conference Call February 26, 2025 9:30 AM ET Company Participants Natalie Schoolcraft - Vice President of Investor Relations Andrew Robinson - Chairman and Chief Executive Officer Mark Haushill - Chief Financial Officer Conference Call Participants Mark Hughes - Truist Securities Matt Carletti - Citizens JMP Charlie Rodgers - Jefferies Alex Scott - Barclays Rowland Mayor - Oppenheimer Andrew Kligerman - TD Cowen Operator Thank you for sta ...