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SuRo Capital(SSSS) - 2024 Q4 - Earnings Call Transcript
SSSSSuRo Capital(SSSS)2025-03-11 23:08
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Financial Data and Key Metrics Changes - The company ended the fourth quarter with a net asset value (NAV) of 157.6millionor157.6 million or 6.68 per share, a decrease from 6.73attheendofQ32024[27][58]−ThedecreaseinNAVpersharewasprimarilydrivenbya6.73 at the end of Q3 2024 [27][58] - The decrease in NAV per share was primarily driven by a 0.22 per share decrease from net change in unrealized appreciation, a 0.16persharedecreaseduetonetinvestmentloss,anda0.16 per share decrease due to net investment loss, and a 0.06 per share decrease from stock-based compensation [58] - The company reported liquid assets totaling approximately 23.6million,representing1023.6 million, representing 10% of gross assets [29][58] Business Line Data and Key Metrics Changes - The top five positions as of December 31 included CoreWeave, OpenAI, Learneo, Blink Health, and Whoop, accounting for approximately 44% of the investment portfolio at fair value [28] - The company made significant investments in AI infrastructure, including a 12 million investment in Vast Data and a 5millionfollow−oninvestmentinCoreWeave[46][14]−VastDatareachedover5 million follow-on investment in CoreWeave [46][14] - Vast Data reached over 200 million in annual recurring revenue (ARR) and has been cash flow positive for the last three years [26] Market Data and Key Metrics Changes - CoreWeave filed its S-1 ahead of an anticipated IPO, targeting a valuation greater than 35billionandseekingtoraiseapproximately35 billion and seeking to raise approximately 4 billion [11] - OpenAI is in talks to raise 40billionata40 billion at a 300 billion valuation, with expectations of revenue tripling from 3.7milliontoover3.7 million to over 12.5 million in 2024 [16][20] - Canva reported having over 220 million monthly users and generating approximately 2.5billioninannualizedrevenue[33]CompanyStrategyandDevelopmentDirection−Thecompanyaimstoprovideaccesstomarket−leadingprivatecompaniesbeforetheygopublic,withafocusonAIinfrastructureandapplications[6][10]−ThecompanyisoptimisticaboutthereopeningoftheIPOwindow,withseveralanticipatedIPOsinitsportfolio[10]−InvestmentsinAIinfrastructureandconsumergoodsareseenaskeygrowthareas,withsignificantcapitalallocatedtothesesectors[43]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedexcitementaboutthecurrentportfolio,highlightingthepotentialforupcomingIPOsandthestrongperformanceofportfoliocompanies[42][79]−Thecompanyacknowledgedrecentmarketvolatilitybutremainshopefulaboutthegrowthprospectsofitsinvestments,particularlyinAI[66][77]−ManagementnotedthatthelargestweightontheportfoliohasbeenLearneo,whichhasbeenmarkeddownsignificantly[67]OtherImportantInformation−Thecompanyhasasharerepurchaseprogramwithapproximately2.5 billion in annualized revenue [33] Company Strategy and Development Direction - The company aims to provide access to market-leading private companies before they go public, with a focus on AI infrastructure and applications [6][10] - The company is optimistic about the reopening of the IPO window, with several anticipated IPOs in its portfolio [10] - Investments in AI infrastructure and consumer goods are seen as key growth areas, with significant capital allocated to these sectors [43] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the current portfolio, highlighting the potential for upcoming IPOs and the strong performance of portfolio companies [42][79] - The company acknowledged recent market volatility but remains hopeful about the growth prospects of its investments, particularly in AI [66][77] - Management noted that the largest weight on the portfolio has been Learneo, which has been marked down significantly [67] Other Important Information - The company has a share repurchase program with approximately 25 million remaining authorized, set to expire on October 31, 2025 [59] - The company has repurchased a total of over 6 million shares since the inception of the program [59] Q&A Session Summary Question: What is the internal base case expectation for NAV growth in 2025? - Management does not typically provide guidance on future NAV but suggests that assumptions can be made based on current portfolio valuations and anticipated IPOs [64][66] Question: Should the company consider issuing additional notes to increase cash on hand? - Management is comfortable with the current capital structure and does not anticipate issuing more convertible securities at this time [72][73] Question: What is the total dollar amount of pre-IPO investments and the likelihood of them going public? - Management is hopeful that CoreWeave will go public soon, with other companies like Lime and Canva also expected to pursue IPOs within the next year [76][77]