Horizon Technology Finance Announces Third Quarter 2025 Financial Results
- Third Quarter 2025 Net Investment Income per Share of
- Debt Portfolio Yield of
- HRZN Ends Quarter with Committed Backlog of
- Declares Regular Monthly Distributions Totaling
Third Quarter 2025 and Recent Highlights
-
Net investment income (“NII”) of
$14.0 million $0.32 $11.8 million $0.32 -
Total investment portfolio of
$603.5 million -
Net asset value of
$315.7 million $7.12 -
Annualized portfolio yield on debt investments of
18.6% for the quarter -
Funded three loans totaling
$15.0 million -
Purchased the remaining assets of a co-lender of the Company for a purchase price of
$22.5 million $36.5 million $34.9 million -
Raised total net proceeds of approximately
$10.6 million - Experienced liquidity events from eight portfolio companies
-
Cash of
$130.9 million $329.0 million - Held portfolio of warrant and equity positions in 95 companies as of September 30, 2025
-
Undistributed spillover income of
$0.93 -
Subsequent to quarter end, declared distributions of
$0.11 - HRZN entered into an agreement pursuant to which Monroe Capital Corporation (“MRCC”; NASDAQ: MRCC) would merge with and into HRZN, subject to the receipt of certain shareholder approvals and the satisfaction of other closing conditions
“We produced a solid third quarter by increasing our net asset value and achieving strong NII, as we moved toward completing our merger with MRCC,” said Mike Balkin, Chief Executive Officer of Horizon. “In the quarter, we originated a modest number of new loans and acquired the portfolio of a co-lender, which was accretive to our net asset value per share. We also achieved positive outcomes with respect to two stressed investments, which is a testament to our ability to work with our portfolio companies to achieve positive solutions in downside situations.”
“We also strengthened our balance sheet in the quarter, completing a
Third Quarter 2025 Operating Results
Total investment income for the quarter ended September 30, 2025 was
The Company’s dollar-weighted annualized yield on average debt investments for the quarter ended September 30, 2025 and 2024 was
Total expenses for the quarter ended September 30, 2025 were
Net investment income for the quarter ended September 30, 2025 was
For the quarter ended September 30, 2025, net realized loss on investments was
For the quarter ended September 30, 2025, net unrealized appreciation on investments was
Portfolio Summary and Investment Activity
As of September 30, 2025, the Company’s debt portfolio consisted of 39 secured loans with an aggregate fair value of
($ in thousands) |
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|||
Beginning portfolio |
$ |
622,653 |
|
$ |
646,862 |
|
$ |
697,891 |
|
$ |
709,085 |
|
|||
|
|
|
|
|
|||||||||||
New debt, equity and warrant investments |
|
37,747 |
|
|
94,117 |
|
|
200,055 |
|
|
140,751 |
|
|||
|
|
|
|
|
|||||||||||
Less refinanced debt balances |
|
— |
|
|
(8,290 |
) |
|
(46,250 |
) |
|
(19,540 |
) |
|||
|
|
|
|
|
|||||||||||
Net new debt, equity and warrant investments |
|
37,747 |
|
|
85,827 |
|
|
153,805 |
|
|
121,211 |
|
|||
|
|
|
|
|
|||||||||||
Principal payments received on investments |
|
(14,462 |
) |
|
(12,502 |
) |
|
(41,292 |
) |
|
(34,805 |
) |
|||
|
|
|
|
|
|||||||||||
Early pay-offs and principal paydowns |
|
(60,904 |
) |
|
(31,890 |
) |
|
(163,312 |
) |
|
(85,643 |
) |
|||
|
|
|
|
|
|||||||||||
Payment-in-kind interest on investments |
|
664 |
|
|
379 |
|
|
1,192 |
|
|
2,114 |
|
|||
|
|
|
|
|
|||||||||||
Accretion of debt investment fees |
|
1,189 |
|
|
1,474 |
|
|
4,487 |
|
|
4,470 |
|
|||
|
|
|
|
|
|||||||||||
New debt investment fees |
|
(100 |
) |
|
(1,522 |
) |
|
(1,604 |
) |
|
(2,089 |
) |
|||
|
|
|
|
|
|||||||||||
Warrants and equity received in settlement of fee income |
|
3,270 |
|
|
— |
|
|
3,280 |
|
|
359 |
|
|||
|
|
|
|
|
|||||||||||
Proceeds from sale of investments |
|
(4,533 |
) |
|
(69 |
) |
|
(5,317 |
) |
|
(157 |
) |
|||
|
|
|
|
|
|||||||||||
Net realized loss on investments |
|
(22,527 |
) |
|
(33,894 |
) |
|
(31,820 |
) |
|
(31,422 |
) |
|||
|
|
|
|
|
|||||||||||
Net unrealized appreciation (depreciation) on investments |
|
40,517 |
|
|
29,335 |
|
|
(13,796 |
) |
|
864 |
|
|||
|
|
|
|
|
|||||||||||
Other |
|
— |
|
|
— |
|
|
— |
|
|
13 |
|
|||
|
|
|
|
|
|||||||||||
Ending portfolio |
$ |
603,514 |
|
$ |
684,000 |
|
$ |
603,514 |
|
$ |
684,000 |
|
|||
Portfolio Asset Quality
The following table shows the classification of Horizon’s loan portfolio at fair value by internal credit rating as of September 30, 2025, June 30, 2025 and December 31, 2024:
($ in thousands) |
September 30, 2025 |
|
June 30, 2025 |
|
December 31, 2024 |
||||||||||||
|
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
|
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
|
Number of Investments |
Debt Investments at Fair Value |
Percentage of Debt Investments |
||||||
Credit Rating |
|
|
|
|
|
|
|
|
|
|
|
||||||
4 |
5 |
$ |
67,965 |
12.1 |
% |
|
5 |
$ |
70,411 |
12.2 |
% |
|
11 |
$ |
159,944 |
25.1 |
% |
3 |
26 |
|
420,823 |
75.2 |
% |
|
33 |
|
467,726 |
80.8 |
% |
|
30 |
|
419,621 |
65.7 |
% |
2 |
4 |
|
42,079 |
7.5 |
% |
|
3 |
|
14,125 |
2.4 |
% |
|
7 |
|
48,760 |
7.6 |
% |
1 |
4 |
|
29,323 |
5.2 |
% |
|
5 |
|
26,909 |
4.6 |
% |
|
4 |
|
10,454 |
1.6 |
% |
Total |
39 |
$ |
560,190 |
100.0 |
% |
|
46 |
$ |
579,171 |
100.0 |
% |
|
52 |
$ |
638,779 |
100.0 |
% |
As of September 30, 2025, June 30, 2025 and December 31, 2024, Horizon’s loan portfolio had weighted average credit ratings of 2.9, 3.0 and 3.1, respectively, with 4 being the highest credit quality rating and 3 being the rating for a standard level of risk. A rating of 2 represents an increased level of risk and, while no loss is currently anticipated for a 2-rated loan, there is potential for future loss of principal. A rating of 1 represents deteriorating credit quality and high degree of risk of loss of principal.
As of September 30, 2025, there were four debt investments with an internal credit rating of 1, with an aggregate cost of
Liquidity and Capital Resources
As of September 30, 2025, the Company had
As of September 30, 2025, there was no outstanding principal balance under the
As of September 30, 2025, there was
Additionally, as of September 30, 2025, there was
Horizon Funding Trust 2022-1, a wholly-owned subsidiary of Horizon, previously issued
On October 17, 2024, the Company entered into a note purchase agreement, by and among the Company, and each purchaser named therein, in connection with the issuance and sale of
On September 4, 2025, the Company entered into a note purchase agreement, by and among the Company, and each purchaser named therein, in connection with the issuance and sale of
During the three months ended September 30, 2025, the Company sold 1,570,248 shares of common stock under its ATM offering program with Goldman Sachs & Co. LLC and B. Riley FBR, Inc. The Company received total accumulated net proceeds of approximately
As of September 30, 2025, the Company’s net debt to equity leverage ratio was
Liquidity Events
During the quarter ended September 30, 2025, Horizon experienced liquidity events from eight portfolio companies. Liquidity events for Horizon may consist of the sale of warrants or equity in portfolio companies, loan prepayments, sale of owned assets or receipt of success fees.
In July, HRZN received proceeds of
In July, a portfolio company paid its outstanding principal balance of
In July, a portfolio company paid its outstanding principal balance of
In July, a portfolio company prepaid its outstanding principal balance of
In August, a portfolio company paid its outstanding principal balance of
In August, HRZN received a partial paydown of
In September, a portfolio company paid its outstanding principal balance of
In September, HRZN sold its equity investment in a portfolio company for gross proceeds of
Net Asset Value
At September 30, 2025, the Company’s net assets were
For the quarter ended September 30, 2025, net increase in net assets resulting from operations was
Stock Repurchase Program
On April 25, 2025, the Company’s board of directors (the “Board”) extended the Company’s previously authorized stock repurchase program until the earlier of June 30, 2026 or the repurchase of
Recent Developments
On October 1, 2025, the Company funded a
On October 6, 2025, the holders of a portion of the 2030 Convertible Notes converted
On October 8, 2025, Hound Labs, Inc. (“Old Hound”) sold substantially all of its assets to Hound Labs II, LLC (“New Hound”) and New Hound assumed certain liabilities of Old Hound, including, without limitation, the liabilities of Old Hound to the Company. Immediately after such transactions, New Hound and the Company entered into an agreement whereby the Company exchanged
On October 14, 2025, Hometeam Technologies, Inc. sold one of its business units and partially repaid
Monthly Distributions Declared in Fourth Quarter 2025
On October 22, 2025, the Company’s Board declared monthly distributions of
Monthly Distributions
Ex-Dividend Date |
Record Date |
Payment Date |
Amount per Share |
|||
December 17, 2025 |
December 17, 2025 |
January 15, 2026 |
|
|||
January 16, 2026 |
January 16, 2026 |
February 13, 2026 |
|
|||
February 17, 2026 |
February 17, 2026 |
March 13, 2026 |
|
|||
|
|
Total: |
|
After paying distributions of
Horizon’s Board sets the level of distributions for each quarter based on its results of operations, spillover income and longer-term outlook. The Board declared monthly distributions of
When declaring distributions, Horizon’s board of directors reviews estimates of taxable income available for distribution, which may differ from consolidated net income under generally accepted accounting principles due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of spillover income carried over from a given year for distribution in the following year. The final determination of taxable income for each tax year, as well as the tax attributes for distributions in such tax year, will be made after the close of the tax year.
Conference Call
The Company will host a conference call on Wednesday, October 29, 2025 at 9:00 a.m. ET to discuss its latest corporate developments and financial results. To participate in the call, please dial (877) 407-9716 (domestic) or (201) 493-6779 (international). The access code for all callers is 13755891. The Company recommends joining the call at least 5 minutes in advance. In addition, a live webcast will be available on the Company’s website at www.horizontechfinance.com.
A webcast replay will be available on the Company’s website for 30 days following the call.
About Horizon Technology Finance
Horizon Technology Finance Corporation (NASDAQ: HRZN), externally managed by Horizon Technology Finance Management LLC, an affiliate of Monroe Capital, is a leading specialty finance company that provides capital in the form of secured loans to venture capital and private equity-backed companies and publicly traded companies in the technology, life science, healthcare information and services, and sustainability industries. The investment objective of Horizon is to maximize its investment portfolio’s return by generating current income from the debt investments it makes and capital appreciation from the warrants it receives when making such debt investments. Horizon is headquartered in
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Horizon’s filings with the Securities and Exchange Commission. Horizon undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Horizon Technology Finance Corporation and Subsidiaries |
|||||||
Consolidated Statements of Assets and Liabilities |
|||||||
(Dollars in thousands, except share and per share data) |
|||||||
|
September 30, |
|
December 31, |
|
|||
|
2025 |
|
2024 |
|
|||
|
(unaudited) |
|
|
|
|||
Assets |
|
|
|
|
|||
Non-affiliate investments at fair value (cost of |
$ |
557,582 |
|
$ |
657,765 |
|
|
Non-controlled affiliate investments at fair value (cost of |
|
44,816 |
|
|
8,307 |
|
|
Controlled affiliate investments at fair value (cost of |
|
1,116 |
|
|
31,819 |
|
|
Total investments at fair value (cost of |
|
603,514 |
|
|
697,891 |
|
|
Cash |
|
84,662 |
|
|
70,264 |
|
|
Investments in money market funds |
|
43,828 |
|
|
27,266 |
|
|
Restricted investments in money market funds |
|
2,417 |
|
|
3,338 |
|
|
Interest receivable |
|
15,867 |
|
|
16,559 |
|
|
Other assets |
|
8,924 |
|
6,515 |
|
||
Total assets |
$ |
759,212 |
$ |
821,833 |
|
||
|
|
|
|
|
|||
Liabilities |
|
|
|
|
|||
Borrowings |
$ |
424,031 |
|
$ |
467,904 |
|
|
Distributions payable |
|
14,624 |
|
|
13,159 |
|
|
Base management fee payable |
|
921 |
|
|
1,045 |
|
|
Other accrued expenses |
|
3,935 |
|
|
3,542 |
|
|
Total liabilities |
|
443,511 |
|
|
485,650 |
|
|
|
|
|
|
|
|||
Commitments and contingencies |
|
|
|
|
|||
|
|
|
|
|
|||
Net assets |
|
|
|
|
|||
Preferred stock, par value |
|
— |
|
|
— |
|
|
Common stock, par value |
|
49 |
|
|
44 |
|
|
Paid-in capital in excess of par |
|
551,358 |
|
|
518,200 |
|
|
Distributable loss |
|
(235,706 |
) |
|
(182,061 |
) |
|
Total net assets |
|
315,701 |
|
|
336,183 |
|
|
Total liabilities and net assets |
$ |
759,212 |
|
$ |
821,833 |
|
|
Net asset value per common share |
$ |
7.12 |
|
$ |
8.43 |
|
|
|
|||||||
Horizon Technology Finance Corporation and Subsidiaries |
|||||||||||||||
Consolidated Statements of Operations (Unaudited) |
|||||||||||||||
(Dollars in thousands, except share and per share data) |
|||||||||||||||
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
|||||||||||
|
September 30, |
|
September 30, |
|
|||||||||||
|
2025 |
|
2024 |
|
2025 |
2024 |
|
||||||||
Investment income |
|
|
|
|
|
|
|
||||||||
From non-affiliate investments: |
|
|
|
|
|
|
|
||||||||
Interest income |
$ |
23,803 |
|
$ |
22,940 |
|
$ |
69,906 |
|
$ |
73,103 |
|
|||
Fee income |
|
2,028 |
|
|
1,382 |
|
|
5,002 |
|
|
2,661 |
|
|||
From non-controlled affiliate investments: |
|
|
|
|
|
|
|
||||||||
Interest income |
|
462 |
|
|
— |
|
|
462 |
|
|
— |
|
|||
From controlled affiliate investments: |
|
|
|
|
|
|
|
||||||||
Interest income (reversal) |
|
25 |
|
|
241 |
|
|
(16 |
) |
|
606 |
|
|||
Total investment income |
|
26,318 |
|
|
24,563 |
|
|
75,354 |
|
|
76,370 |
|
|||
Expenses |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
7,897 |
|
|
7,945 |
|
|
24,780 |
|
|
24,046 |
|
|||
Base management fee |
|
2,748 |
|
|
2,989 |
|
|
8,887 |
|
|
9,178 |
|
|||
Performance based incentive fee |
|
— |
|
|
— |
|
|
— |
|
|
295 |
|
|||
Administrative fee |
|
377 |
|
|
400 |
|
|
1,203 |
|
|
1,259 |
|
|||
Professional fees |
|
493 |
|
|
587 |
|
|
1,722 |
|
|
1,707 |
|
|||
General and administrative |
|
437 |
|
|
432 |
|
|
1,477 |
|
|
1,419 |
|
|||
Total expenses |
|
11,952 |
|
|
12,353 |
|
|
38,069 |
|
|
37,904 |
|
|||
Net investment income before excise tax |
|
14,366 |
|
|
12,210 |
|
|
37,285 |
|
|
38,466 |
|
|||
Provision for excise tax |
|
373 |
|
|
373 |
|
|
1,123 |
|
|
1,109 |
|
|||
Net investment income |
|
13,993 |
|
|
11,837 |
|
|
36,162 |
|
|
37,357 |
|
|||
Net realized and unrealized gain (loss) |
|
|
|
|
|
|
|
||||||||
Net realized gain (loss) on non-affiliate investments |
|
2,590 |
|
|
(33,894 |
) |
|
(6,703 |
) |
|
(31,459 |
) |
|||
Net realized gain on non-controlled affiliate investments |
|
— |
|
|
— |
|
|
— |
|
|
37 |
|
|||
Net realized loss on controlled affiliate investments |
|
(25,117 |
) |
|
— |
|
|
(25,117 |
) |
|
— |
|
|||
Net realized loss on investments |
|
(22,527 |
) |
|
(33,894 |
) |
|
(31,820 |
) |
|
(31,422 |
) |
|||
Net realized loss on extinguishment of debt |
|
(1,261 |
) |
|
— |
|
|
(2,037 |
) |
|
— |
|
|||
Net realized loss |
|
(23,788 |
) |
|
(33,894 |
) |
|
(33,857 |
) |
|
(31,422 |
) |
|||
Net unrealized appreciation (depreciation) on non-affiliate investments |
|
25,659 |
|
|
35,407 |
|
|
(1,266 |
) |
|
(2,094 |
) |
|||
Net unrealized appreciation (depreciation) on non-controlled affiliate investments |
|
1,812 |
|
|
(6,237 |
) |
|
210 |
|
|
8,374 |
|
|||
Net unrealized appreciation (depreciation) on controlled affiliate investments |
|
13,046 |
|
|
165 |
|
|
(12,740 |
) |
|
(5,416 |
) |
|||
Net unrealized appreciation (depreciation) on investments |
|
40,517 |
|
|
29,335 |
|
|
(13,796 |
) |
|
864 |
|
|||
Net realized and unrealized gain (loss) |
|
16,729 |
|
|
(4,559 |
) |
|
(47,653 |
) |
|
(30,558 |
) |
|||
Net increase (decrease) in net assets resulting from operations |
$ |
30,722 |
|
$ |
7,278 |
|
$ |
(11,491 |
) |
$ |
6,799 |
|
|||
Net investment income per common share - basic |
$ |
0.32 |
|
$ |
0.32 |
|
$ |
0.87 |
|
$ |
1.06 |
|
|||
Net investment income per common share - diluted |
$ |
0.31 |
|
$ |
0.32 |
|
$ |
0.87 |
|
$ |
1.06 |
|
|||
Net increase (decrease) in net assets resulting from operations per common share - basic |
$ |
0.71 |
|
$ |
0.20 |
|
$ |
(0.28 |
) |
$ |
0.19 |
|
|||
Net increase (decrease) in net assets resulting from operations per common share - diluted |
$ |
0.68 |
|
$ |
0.20 |
|
$ |
(0.28 |
) |
$ |
0.19 |
|
|||
Weighted average shares outstanding - basic |
|
43,101,307 |
|
|
36,571,000 |
|
|
41,525,869 |
|
|
35,200,189 |
|
|||
Weighted average shares outstanding - diluted |
|
45,838,142 |
|
|
36,571,000 |
|
|
41,525,869 |
|
|
35,200,189 |
|
|||
Distributions declared per share |
$ |
0.33 |
|
$ |
0.33 |
|
$ |
0.99 |
|
$ |
1.04 |
|
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20251028803186/en/
Investor Relations:
ICR
Garrett Edson
ir@horizontechfinance.com
(646) 200-8885
Media Relations:
ICR
Chris Gillick
HorizonPR@icrinc.com
(646) 677-1819
Source: Horizon Technology Finance Corporation
