Fidus Investment Corporation Announces First Quarter 2025 Financial Results
- Net realized gain of $11.5 million ($0.33 per share) from two equity investment exits
- Strong portfolio yield of 13.2% on debt investments
- Increased total investment income by 5.3% year-over-year to $36.5 million
- Healthy liquidity position with $207.5 million available through cash and unused credit facility
- 72.8% of debt portfolio consists of variable rate investments, beneficial in high-rate environment
- Adjusted net investment income per share decreased to $0.54 from $0.59 year-over-year
- Interest on idle funds decreased by 66.6% to $571,000
- Net investment income per share declined 7% year-over-year to $0.53
Insights
Fidus reported solid Q1 2025 with growing income, portfolio expansion, and realized gains; maintained strong dividend despite dilution from share issuance.
Fidus Investment Corporation's Q1 2025 results reveal methodical portfolio growth with total investment income of $36.5 million, increasing 5.3% year-over-year. This growth came primarily from a $2.4 million increase in interest income and $0.8 million higher dividend income, partially offset by decreases in fee income (-9.8%) and interest on idle funds (-66.6%).
Net investment income grew 3.4% to $18.2 million, though on a per-share basis it declined from $0.57 to $0.53 (-7.0%) due to dilution from the company's ATM program that raised $20.7 million during the quarter. This dilution effect bears watching, though it provides necessary capital for the company's growth strategy.
The portfolio expanded meaningfully with $115.6 million invested (including seven new portfolio companies) versus $57.3 million in repayments. New investments spanned diverse sectors including healthcare, steel manufacturing, and payroll processing. A standout achievement was the $11.5 million in net realized gains ($0.33 per share) from two equity investments, demonstrating successful execution of their equity co-investment approach.
The portfolio appears healthy with fair value at 100.5% of cost, indicating slight overall appreciation. The weighted average yield on debt investments remains strong at 13.2%, generating a substantial spread over Fidus's own weighted average borrowing cost of 4.8%.
The balance sheet is well-structured with $67.5 million in cash, $140 million in unused credit facility capacity, and diversified long-term debt with staggered maturities between 2026 and 2030. This financial flexibility supports their declared Q2 2025 dividend of $0.54 per share ($0.43 base + $0.11 supplemental), which is further backed by substantial spillover income of $47.4 million ($1.36 per share).
Portfolio construction favors variable rate investments (72.8% of debt investments), which helps maintain yield in the current interest rate environment while providing protection against further rate increases.
Board of Directors Declared Total Dividends of
Base Dividend of
EVANSTON, Ill., May 08, 2025 (GLOBE NEWSWIRE) -- Fidus Investment Corporation (NASDAQ:FDUS) (“Fidus” or the “Company”), a provider of customized debt and equity financing solutions, primarily to lower middle-market companies based in the United States, today announced its financial results for the first quarter ended March 31, 2025.
First Quarter 2025 Financial Highlights
- Total investment income of
$36.5 million - Net investment income of
$18.2 million , or$0.53 per share - Adjusted net investment income of
$18.5 million , or$0.54 per share(1) - Invested
$115.6 million in debt and equity securities, including seven new portfolio companies - Received proceeds from repayments and realizations of
$57.3 million - Paid total dividends of
$0.54 per share: regular quarterly dividend of$0.43 and a supplemental dividend of$0.11 per share on March 27, 2025 - Net asset value (“NAV”) of
$677.9 million , or$19.39 per share, as of March 31, 2025 - Estimated spillover income (or taxable income in excess of distributions) as of March 31, 2025 of
$47.4 million , or$1.36 per share
Management Commentary
“We continued to build our portfolio of debt and equity investments in a methodical and disciplined manner during the first quarter by investing in high quality businesses with defensive characteristics and resilient business models that generate high levels of cash flow to service debt and support growth. We also monetized two equity investments for a net realized gain of
(1) Supplemental information regarding adjusted net investment income:
On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The management agreement with our investment adviser provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses. In addition, we accrue, but do not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. As such, we believe that adjusted net investment income is a useful indicator of operations exclusive of any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Reconciliations of net investment income to adjusted net investment income are set forth in Schedule 1.
First Quarter 2025 Financial Results
The following table provides a summary of our operating results for the three months ended March 31, 2025, as compared to the same period in 2024 (dollars in thousands, except per share data):
| Three Months Ended March 31, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Interest income | $ | 30,319 | $ | 28,138 | $ | 2,181 | 7.8 | % | ||||||||
| Payment-in-kind interest income | 2,248 | 2,049 | 199 | 9.7 | % | |||||||||||
| Dividend income | 1,231 | 397 | 834 | 210.1 | % | |||||||||||
| Fee income | 2,127 | 2,359 | (232 | ) | (9.8 | %) | ||||||||||
| Interest on idle funds | 571 | 1,708 | (1,137 | ) | (66.6 | %) | ||||||||||
| Total investment income | $ | 36,496 | $ | 34,651 | $ | 1,845 | 5.3 | % | ||||||||
| Net investment income | $ | 18,222 | $ | 17,627 | $ | 595 | 3.4 | % | ||||||||
| Net investment income per share | $ | 0.53 | $ | 0.57 | $ | (0.04 | ) | (7.0 | %) | |||||||
| Adjusted net investment income (1) | $ | 18,509 | $ | 18,126 | $ | 383 | 2.1 | % | ||||||||
| Adjusted net investment income per share (1) | $ | 0.54 | $ | 0.59 | $ | (0.05 | ) | (8.5 | %) | |||||||
| Net increase (decrease) in net assets resulting from operations | $ | 19,658 | $ | 20,123 | $ | (465 | ) | (2.3 | %) | |||||||
| Net increase (decrease) in net assets resulting from operations per share | $ | 0.58 | $ | 0.65 | $ | (0.07 | ) | (10.8 | %) | |||||||
The
For the three months ended March 31, 2025, total expenses, including the base management fee waiver and income tax provision, were
Net investment income increased by
For the three months ended March 31, 2025, the total net realized gain/(loss) on investments, net of income tax (provision)/benefit on realized gains, was
Portfolio and Investment Activities
As of March 31, 2025, the fair value of our investment portfolio totaled
First quarter 2025 investment activity included the following new portfolio company investments:
- AMOpportunities, Inc., a healthcare training platform providing tech-enabled clinical rotation development and management services for schools, providers, and health systems. Fidus invested
$10.0 million in first lien debt and$0.7 million in preferred equity. - Customer Expressions Corp. (dba Case IQ), a provider of SaaS-based Governance, Risk and Compliance (GRC) solutions to mid-size and large enterprises. Fidus invested
$15.0 million in first lien debt and$0.8 million in common equity. - Fraser Steel LLC, a designer and manufacturer of steel tubular parts and assemblies for OEM customers used in a wide range of applications. Fidus invested
$14.0 million in first lien debt,$0.1 million in preferred equity,$0.5 million in common equity, and made additional commitments up to$2.0 million in a revolving loan. - Info Tech Operating, LLC (dba infotech), a software solutions provider for the infrastructure construction industry. Fidus invested
$13.5 million in first lien debt. - Mayesh Wholesale Florist, LLC, a leading U.S. wholesaler of premium, fresh cut flowers. Fidus invested
$10.5 million in first lien debt,$0.5 million in preferred equity, and made additional commitments up to$2.0 million in first lien debt. - Onsight Industries, LLC, a leading provider of customized signs & displays, mailbox solutions, and site furnishings for the home builder and land developer industries. Fidus invested
$9.1 million in first lien debt and$0.4 million in common equity. - PayEntry Financial Services, Inc. (dba Payentry), a leading provider of payroll processing and other complementary HR services (e.g., insurance, 401K, benefits, HCM solutions) to SMBs. Fidus invested
$5.6 million in second lien debt,$0.8 million in preferred equity, and made additional commitments up to$6.0 million in second lien debt.
Liquidity and Capital Resources
As of March 31, 2025, we had
Second Quarter 2025 Dividends Totaling
On May 5, 2025, our board of directors declared a base dividend of
When declaring dividends, our board of directors reviews estimates of taxable income available for distribution, which differs from consolidated income under GAAP due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of undistributed taxable income carried over from a given year for distribution in the following year. The final determination of 2025 taxable income, as well as the tax attributes for 2025 dividends, will be made after the close of the 2025 tax year. The final tax attributes for 2025 dividends will generally include ordinary taxable income but may also include capital gains, qualified dividends and return of capital.
Fidus has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of dividends on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, when we declare a cash dividend, stockholders who have not “opted out” of the DRIP at least two days prior to the dividend payment date will have their cash dividends automatically reinvested in additional shares of our common stock. Those stockholders whose shares are held by a broker or other financial intermediary may receive dividends in cash by notifying their broker or other financial intermediary of their election.
Subsequent Events
On April 15, 2025, we invested
On April 23, 2025, we exited our debt investments in Elements Brands, LLC. We received payment in full of
On May 5, 2025, we issued an additional
First Quarter 2025 Financial Results Conference Call
Management will host a conference call to discuss the operating and financial results at 9:00am ET on Friday, May 9, 2025. To participate in the conference call, please dial (844) 808-7136 approximately 10 minutes prior to the call. International callers should dial (412) 317-0534. Please ask to be joined into the Fidus Investment Corporation call.
A live webcast of the conference call will be available at http://investor.fdus.com/news-events/events-presentations. Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software. An archived replay of the conference call will also be available in the investor relations section of the Company’s website.
ABOUT FIDUS INVESTMENT CORPORATION
Fidus Investment Corporation provides customized debt and equity financing solutions to lower middle-market companies, which management generally defines as U.S. based companies with revenues between
Fidus is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended. In addition, for tax purposes, Fidus has elected to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Fidus was formed in February 2011 to continue and expand the business of Fidus Mezzanine Capital, L.P., which commenced operations in May 2007 and was licensed by the U.S. Small Business Administration as a Small Business Investment Company (SBIC).
FORWARD-LOOKING STATEMENTS
This press release may contain certain forward-looking statements which are based upon current expectations and are inherently uncertain, including, but not limited to, statements about the future performance and financial condition of the Company, the prospects of our existing and prospective portfolio companies, the financial condition and ability of our existing and prospective portfolio companies to achieve their objectives, and the timing, form and amount of any distributions or supplemental dividends in the future. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company’s control, such as changes in the financial and lending markets, the impact of the general economy (including an economic downturn or recession), the impact of interest rate volatility and the impact of elevated levels of inflation on the Company’s portfolio companies and the industries in which it invests, and the uncertainty relating to the general economy (including the uncertainty with respect to new tariffs and trade policies); accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future as a result of a number of factors related to changes in the markets in which the Company invests, changes in the financial, capital, and lending markets, and other factors described from time to time in the Company’s filings with the Securities and Exchange Commission. Such statements speak only as of the time when made, and are based on information available to the Company as of the date hereof and are qualified in their entirety by this cautionary statement. The Company undertakes no obligation to update any such statement now or in the future, except as required by applicable law.
| FIDUS INVESTMENT CORPORATION Consolidated Statements of Assets and Liabilities (in thousands, except shares and per share data) | ||||||||
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Investments, at fair value: | ||||||||
| Control investments (cost: | $ | — | $ | — | ||||
| Affiliate investments (cost: | 91,066 | 102,024 | ||||||
| Non-control/non-affiliate investments (cost: | 1,063,342 | 988,482 | ||||||
| Total investments, at fair value (cost: | 1,154,408 | 1,090,506 | ||||||
| Cash and cash equivalents | 67,478 | 57,159 | ||||||
| Interest receivable | 18,404 | 15,119 | ||||||
| Proceeds receivable from stock offering | 701 | — | ||||||
| Prepaid expenses and other assets | 991 | 1,328 | ||||||
| Total assets | $ | 1,241,982 | $ | 1,164,112 | ||||
| LIABILITIES | ||||||||
| SBA debentures, net of deferred financing costs | $ | 175,870 | $ | 168,899 | ||||
| Notes, net of deferred financing costs | 345,557 | 248,362 | ||||||
| Borrowings under Credit Facility, net of deferred financing costs | (948 | ) | 43,954 | |||||
| Secured borrowings | 13,601 | 13,674 | ||||||
| Accrued interest and fees payable | 3,573 | 5,784 | ||||||
| Base management fee payable, net of base management fee waiver – due to affiliate | 4,863 | 4,805 | ||||||
| Income incentive fee payable – due to affiliate | 4,594 | 4,477 | ||||||
| Capital gains incentive fee payable – due to affiliate | 14,990 | 14,703 | ||||||
| Administration fee payable and other, net – due to affiliate | 295 | 919 | ||||||
| Taxes payable | 325 | 1,850 | ||||||
| Accounts payable and other liabilities | 1,332 | 1,019 | ||||||
| Total liabilities | $ | 564,052 | $ | 508,446 | ||||
| Commitments and contingencies | ||||||||
| NET ASSETS | ||||||||
| Common stock, | ||||||||
| issued and outstanding at March 31, 2025 and December 31, 2024, respectively) | $ | 35 | $ | 34 | ||||
| Additional paid-in capital | 588,519 | 567,159 | ||||||
| Total distributable earnings | 89,376 | 88,473 | ||||||
| Total net assets | 677,930 | 655,666 | ||||||
| Total liabilities and net assets | $ | 1,241,982 | $ | 1,164,112 | ||||
| Net asset value per common share | $ | 19.39 | $ | 19.33 | ||||
| FIDUS INVESTMENT CORPORATION Consolidated Statements of Operations (unaudited) (in thousands, except shares and per share data) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Investment Income: | ||||||||
| Interest income | ||||||||
| Control investments | $ | — | $ | — | ||||
| Affiliate investments | 1,094 | 869 | ||||||
| Non-control/non-affiliate investments | 29,225 | 27,269 | ||||||
| Total interest income | 30,319 | 28,138 | ||||||
| Payment-in-kind interest income | ||||||||
| Control investments | — | — | ||||||
| Affiliate investments | — | — | ||||||
| Non-control/non-affiliate investments | 2,248 | 2,049 | ||||||
| Total payment-in-kind interest income | 2,248 | 2,049 | ||||||
| Dividend income | ||||||||
| Control investments | — | — | ||||||
| Affiliate investments | 886 | 348 | ||||||
| Non-control/non-affiliate investments | 345 | 49 | ||||||
| Total dividend income | 1,231 | 397 | ||||||
| Fee income | ||||||||
| Control investments | — | — | ||||||
| Affiliate investments | 8 | 5 | ||||||
| Non-control/non-affiliate investments | 2,119 | 2,354 | ||||||
| Total fee income | 2,127 | 2,359 | ||||||
| Interest on idle funds | 571 | 1,708 | ||||||
| Total investment income | 36,496 | 34,651 | ||||||
| Expenses: | ||||||||
| Interest and financing expenses | 6,773 | 6,012 | ||||||
| Base management fee | 4,922 | 4,432 | ||||||
| Incentive fee - income | 4,594 | 4,467 | ||||||
| Incentive fee (reversal) - capital gains | 287 | 499 | ||||||
| Administrative service expenses | 602 | 537 | ||||||
| Professional fees | 948 | 937 | ||||||
| Other general and administrative expenses | 206 | 229 | ||||||
| Total expenses before base management fee waiver | 18,332 | 17,113 | ||||||
| Base management fee waiver | (59 | ) | (69 | ) | ||||
| Total expenses, net of base management fee waiver | 18,273 | 17,044 | ||||||
| Net investment income before income taxes | 18,223 | 17,607 | ||||||
| Income tax provision (benefit) | 1 | (20 | ) | |||||
| Net investment income | 18,222 | 17,627 | ||||||
| Net realized and unrealized gains (losses) on investments: | ||||||||
| Net realized gains (losses): | ||||||||
| Control investments | — | — | ||||||
| Affiliate investments | 10,066 | — | ||||||
| Non-control/non-affiliate investments | 3,264 | 1,743 | ||||||
| Total net realized gain (loss) on investments | 13,330 | 1,743 | ||||||
| Income tax (provision) benefit from realized gains on investments | (1,850 | ) | 56 | |||||
| Net change in unrealized appreciation (depreciation): | ||||||||
| Control investments | — | — | ||||||
| Affiliate investments | (6,890 | ) | (3,236 | ) | ||||
| Non-control/non-affiliate investments | (2,903 | ) | 4,454 | |||||
| Total net change in unrealized appreciation (depreciation) on investments | (9,793 | ) | 1,218 | |||||
| Net gain (loss) on investments | 1,687 | 3,017 | ||||||
| Realized losses on extinguishment of debt | (251 | ) | (521 | ) | ||||
| Net increase (decrease) in net assets resulting from operations | $ | 19,658 | $ | 20,123 | ||||
| Per common share data: | ||||||||
| Net investment income per share-basic and diluted | $ | 0.53 | $ | 0.57 | ||||
| Net increase in net assets resulting from operations per share — basic and diluted | $ | 0.58 | $ | 0.65 | ||||
| Dividends declared per share | $ | 0.54 | $ | 0.65 | ||||
| Weighted average number of shares outstanding — basic and diluted | 34,077,720 | 30,776,758 | ||||||
| Schedule 1 Supplemental Information Regarding Adjusted Net Investment Income |
On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The management agreement with our investment advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses for such year, less the aggregate amount of any capital gains incentive fees paid in all prior years. In addition, we accrue, but do not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate. As such, we believe that adjusted net investment income is a useful indicator of operations exclusive of any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. The following table provides a reconciliation of net investment income to adjusted net investment income for the three months ended March 31, 2025 and 2024.
| ($ in thousands) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (unaudited) | ||||||||
| 2025 | 2024 | |||||||
| Net investment income | $ | 18,222 | $ | 17,627 | ||||
| Capital gains incentive fee expense (reversal) | 287 | 499 | ||||||
| Adjusted net investment income (1) | $ | 18,509 | $ | 18,126 | ||||
| (Per share) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (unaudited) | ||||||||
| 2025 | 2024 | |||||||
| Net investment income | $ | 0.53 | $ | 0.57 | ||||
| Capital gains incentive fee expense (reversal) | 0.01 | 0.02 | ||||||
| Adjusted net investment income (1) | $ | 0.54 | $ | 0.59 | ||||
| (1) | Adjusted net investment income per share amounts are calculated as adjusted net investment income divided by weighted average shares outstanding for the period. Due to rounding, the sum of net investment income per share and capital gains incentive fee expense (reversal) amounts may not equal the adjusted net investment income per share amount presented here. | |
| Company Contact: | Investor Relations Contact: |
| Shelby E. Sherard | Jody Burfening |
| Chief Financial Officer | Alliance Advisors IR |
| (847) 859-3940 | (212) 838-3777 |
| ssherard@fidusinv.com | jburfening@allianceadvisors.com |
FAQ
What dividends did FDUS declare for Q2 2025?
What was Fidus Investment Corporation's (FDUS) net investment income for Q1 2025?
How much did FDUS invest in new portfolio companies during Q1 2025?
What is FDUS's current NAV per share as of Q1 2025?
What was the weighted average yield on FDUS's debt investments?
