Runway Growth Finance Corp. Reports First Quarter 2025 Financial Results
- Strong portfolio yield of 15.44% on debt investments
- Healthy liquidity position with $315.4 million available
- Net realized gains of $6.1 million on investments
- Regular dividend of $0.33 plus supplemental dividend of $0.02 per share
- Successfully raised $107 million through Series 2025A Senior Notes
- Total investment income decreased to $35.4M from $40.0M YoY
- Net investment income declined to $15.6M from $18.7M YoY
- Net assets decreased 4.9% YoY to $503.3M from $529.5M
- Unrealized loss on investments of $19.8M, up from $6.6M loss YoY
Insights
RWAY reported lower Q1 results year-over-year but maintained healthy dividend coverage with noteworthy portfolio realizations generating significant gains.
Runway Growth's Q1 2025 results reveal a notable 11.5% decline in total investment income to
Portfolio activity shows a strategic rebalancing, with the company generating
The investment portfolio stands at
Most encouraging is the company's substantial liquidity position of
The NAV per share of
RWAY's Q1 shows reduced earnings but strong portfolio monetization, healthy yield maintenance, and improved liquidity position amid cautious growth strategy.
Runway Growth's Q1 results reveal a company deliberately recycling capital while maintaining yield discipline. The
The significant capital return events are the standout feature of the quarter. The company generated
The
The cautious deployment pace - just
Balance sheet management improved with leverage reduction from
Delivered Total and Net Investment Income of
Investment Portfolio of
Conference Call Today, Monday, May 12, 2025 at 5:00 p.m. ET
MENLO PARK, Calif., May 12, 2025 (GLOBE NEWSWIRE) -- Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the “Company”), a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, today announced its financial results for the first quarter ended March 31, 2025.
First Quarter 2025 Highlights
- Total investment income of
$35.4 million - Net investment income of
$15.6 million , or$0.42 per share - Net asset value of
$503.3 million , or$13.48 per share - Dollar-weighted annualized yield on debt investments of
15.44% - Three investments completed in existing portfolio companies, representing
$50.7 million in funded investments - Aggregate proceeds of
$71.9 million in principal prepayments and$3.7 million from scheduled amortization - Aggregate proceeds of
$38.1 million in equity sale proceeds, resulting in net realized gains of$7.4 million - Total net realized gains on investments of
$6.1 million
Second Quarter 2025 Distributions
- Declared second quarter 2025 regular dividend of
$0.33 per share - Declared second quarter 2025 supplemental dividend of
$0.02 per share
“In the first quarter of 2025, Runway Growth advanced its platform strategy, enhancing origination channels as we seek to maximize our portfolio,” said David Spreng, Founder and CEO of Runway Growth. “For the first quarter, we delivered net investment income of
First Quarter 2025 Operating Results
Total investment income for the quarter ended March 31, 2025 was
Net investment income for the quarter ended March 31, 2025 was
The Company's dollar-weighted annualized yield on average debt investments for the quarter ended March 31, 2025 was
Total operating expenses for the quarter ended March 31, 2025 were
Net realized gain on investments was
For the quarter ended March 31, 2025, net change in unrealized loss on investments was
Portfolio and Investment Activity
As of March 31, 2025, Runway Growth’s investment portfolio had an aggregate fair value of
During the first quarter of 2025, Runway Growth funded three investments in existing portfolio companies, representing
Total portfolio investment activity for the three months ended March 31, 2025 and 2024 was as follows:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Beginning investment portfolio | $ | 1,076,840 | $ | 1,067,009 | ||||
| Purchases of investments | 15,320 | 24,642 | ||||||
| PIK interest | 3,260 | 4,176 | ||||||
| Sales and prepayments of investments | (74,978 | ) | (34,449 | ) | ||||
| Scheduled repayments of investments | (3,665 | ) | (413 | ) | ||||
| Sales and maturities of U.S. Treasury Bills | - | (42,029 | ) | |||||
| Amortization of fixed income premiums or accretion of discounts | 1,189 | 4,013 | ||||||
| Net realized gain (loss) on investments | 6,057 | - | ||||||
| Net change in unrealized gain (loss) on investments | (19,790 | ) | (6,617 | ) | ||||
| Ending investment portfolio | $ | 1,004,233 | $ | 1,016,332 | ||||
Net Asset Value
As of March 31, 2025, net asset value per share was
For the quarter ended March 31, 2025, our net increase in net assets resulting from operations was
Liquidity and Capital Resources
As of March 31, 2025, the Company had approximately
The Company ended the quarter with a core leverage ratio of approximately
Distributions
On May 7, 2025, the Company’s board of directors (the "Board of Directors") declared a regular quarterly distribution of
Recent Developments
The Company evaluated events subsequent to March 31, 2025 through May 12, 2025, the date the consolidated financial statements were issued. There have been no subsequent events that occurred during such period that would require recognition or disclosure, except as disclosed below.
Borrowings
On April 7, 2025, the Company entered into the Master Note Purchase Agreement, dated April 7, 2025 (the “Note Purchase Agreement”), governing the issuance of
The Series 2025A Notes have a fixed interest rate of
The Series 2025A Notes will mature on April 7, 2028 unless redeemed, purchased or prepaid prior to such date by the Company in accordance with the terms of the Note Purchase Agreement. Interest on the Series 2025A Notes will be due semiannually on April 7 and October 7 of each year, beginning on October 7, 2025. In addition, the Company is obligated to offer to repay the Series 2025A Notes at par (plus accrued and unpaid interest to, but not including, the date of prepayment) if certain change in control events occur. Subject to the terms of the Note Purchase Agreement, so long as no Default or Event of Default (each as defined in the Note Purchase Agreement) shall then exist, at any time on or after October 7, 2027, the Company may, at its option, prepay all or any part of the 2025A Notes at
The Note Purchase Agreement contains customary terms and conditions for senior notes issued in a private placement, including, without limitation, affirmative and negative covenants related to information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act of 1940, as amended, and a regulated investment company under the Internal Revenue Code of 1986, as amended, minimum shareholders’ equity, minimum asset coverage ratio and maximum secured debt ratio. The Note Purchase Agreement also contains customary events of default with customary cure and notice periods.
Recent Portfolio Activity
From April 1, 2025 through May 12, 2025, the Company completed
Share Repurchase Program
On May 7, 2025, the Board of Directors approved a repurchase program (the “New Repurchase Program”) under which the Company may repurchase up to
Conference Call
Runway Growth will hold a conference call to discuss its first quarter ended March 31, 2025 financial results at 2:00 p.m. PT (5:00 p.m. ET) on Monday, May 12, 2025. To participate in the conference call or webcast, participants should register online at the Runway Investor Relations website. The earnings call can also be accessed through the following links:
A live webcast will be available in the investor section of the Company’s website, and will be archived for 90 days following the call.
About Runway Growth Finance Corp.
Runway Growth is a growing specialty finance company focused on providing flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity. Runway Growth is a closed-end investment fund that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. Runway Growth is externally managed by Runway Growth Capital LLC, an established registered investment advisor that was formed in 2015 and led by industry veteran David Spreng. For more information, please visit www.runwaygrowth.com.
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 Runway Growth’s filings with the Securities and Exchange Commission. Runway Growth 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.
Important Disclosures
Strategies described involve special risks that should be evaluated carefully before a decision is made to invest. Not all of the risks and other significant aspects of these strategies are discussed herein. Please see a more detailed discussion of these risk factors and other related risks in the Company’s most recent annual report on Form 10-K in the section entitled “Risk Factors”, and in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2025, which may be obtained on the Company’s website, www.runwaygrowth.com, or the SEC’s website, www.sec.gov.
IR Contacts:
Taylor Donahue, Prosek Partners, tdonahue@prosek.com
Thomas B. Raterman, Chief Financial Officer and Chief Operating Officer, tr@runwaygrowth.com
| RUNWAY GROWTH FINANCE CORP. Consolidated Statements of Assets and Liabilities (In thousands, except share and per share data) | ||||||
| March 31, 2025 | December 31, 2024 | |||||
| (Unaudited) | ||||||
| Assets | ||||||
| Investments at fair value: | ||||||
| Non-control/non-affiliate investments at fair value (cost of | $ | 997,359 | $ | 1,005,328 | ||
| Affiliate investments at fair value (cost of | — | 64,572 | ||||
| Control investments at fair value (cost of | 6,874 | 6,940 | ||||
| Total investments at fair value (cost of | 1,004,233 | 1,076,840 | ||||
| Cash and cash equivalents | 18,356 | 5,751 | ||||
| Interest and fees receivable | 8,730 | 8,141 | ||||
| Other assets | 1,577 | 623 | ||||
| Total assets | 1,032,896 | 1,091,355 | ||||
| Liabilities | ||||||
| Debt: | ||||||
| Credit facility | 253,000 | 311,000 | ||||
| 2026 Notes | 95,000 | 95,000 | ||||
| 2027 Notes | 152,250 | 152,250 | ||||
| Unamortized deferred financing costs | (8,043 | ) | (5,918 | ) | ||
| Total debt, less unamortized deferred financing costs | 492,207 | 552,332 | ||||
| Distributions payable | 13,445 | — | ||||
| Incentive fees payable | 14,045 | 14,106 | ||||
| Interest payable | 7,656 | 7,743 | ||||
| Accrued expenses and other liabilities | 2,253 | 2,305 | ||||
| Total liabilities | 529,606 | 576,486 | ||||
| Net assets | ||||||
| Common stock, par value | 373 | 373 | ||||
| Additional paid-in capital | 557,992 | 557,992 | ||||
| Accumulated undistributed (overdistributed) earnings | (55,075 | ) | (43,496 | ) | ||
| Total net assets | $ | 503,290 | $ | 514,869 | ||
| Shares of common stock outstanding ( | 37,347,428 | 37,347,428 | ||||
| Net asset value per share | $ | 13.48 | $ | 13.79 | ||
| RUNWAY GROWTH FINANCE CORP. Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data) | ||||||
| Three Months Ended March 31, | ||||||
| 2025 | 2024 | |||||
| Investment income | ||||||
| From non-control/non-affiliate investments: | ||||||
| Interest income | $ | 30,109 | $ | 34,455 | ||
| Payment-in-kind interest income | 3,651 | 4,207 | ||||
| Dividend income | 318 | — | ||||
| Fee income | 229 | 620 | ||||
| From affiliate investments: | ||||||
| Interest income | 646 | 599 | ||||
| Fee income | 256 | — | ||||
| Other income | 189 | 128 | ||||
| Total investment income | 35,398 | 40,009 | ||||
| Operating expenses | ||||||
| Management fees | 4,009 | 3,952 | ||||
| Incentive fees | 3,929 | 4,668 | ||||
| Interest and other debt financing expenses | 10,287 | 10,860 | ||||
| Professional fees | 454 | 662 | ||||
| Administration agreement expenses | 625 | 564 | ||||
| Insurance expense | 155 | 208 | ||||
| Tax expense | 110 | 2 | ||||
| Other expenses | 230 | 429 | ||||
| Total operating expenses | 19,799 | 21,345 | ||||
| Net investment income | 15,599 | 18,664 | ||||
| Net realized and net change in unrealized gain (loss) on investments | ||||||
| Net realized gain (loss) on non-control/non-affiliate investments | (2,886 | ) | — | |||
| Net realized gain (loss) on affiliate investments | 8,943 | — | ||||
| Net realized gain (loss) on investments | 6,057 | — | ||||
| Net change in unrealized gain (loss) on non-control/non-affiliate investments | (9,799 | ) | (5,065 | ) | ||
| Net change in unrealized gain (loss) on affiliate investments | (9,925 | ) | (1,552 | ) | ||
| Net change in unrealized gain (loss) on control investments | (66 | ) | — | |||
| Net change in unrealized gain (loss) on investments | (19,790 | ) | (6,617 | ) | ||
| Net realized and unrealized gain (loss) on investments | (13,733 | ) | (6,617 | ) | ||
| Net increase (decrease) in net assets resulting from operations | $ | 1,866 | $ | 12,047 | ||
| Net investment income per common share (basic and diluted) | $ | 0.42 | $ | 0.46 | ||
| Net increase (decrease) in net assets resulting from operations per common share (basic and diluted) | $ | 0.05 | $ | 0.30 | ||
| Weighted average shares outstanding (basic and diluted) | 37,347,428 | 40,392,255 | ||||
FAQ
What was Runway Growth Finance's (RWAY) net investment income for Q1 2025?
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How much liquidity does Runway Growth Finance have available?
