Summary of RWAY Q4 2025 Earnings Call

1Key Financial Results and Metrics

Total Investment Income: $30 million, down from $36.7 million in Q4 2024.

Net Investment Income (NII): $11.6 million, decreased from $15.7 million in Q4 2024.

NII per Share: $0.32, with a base dividend of $0.33 per share.

Fair Value of Total Investment Portfolio: $927.4 million, a 2% decline from $946 million at the end of 2024.

Weighted Average Portfolio Risk Rating: Increased to 2.45 from 2.42.

Net Assets: $484.9 million, down from $489.5 million at year-end 2024.

NAV per Share: $13.42, a 1% decrease from $13.55.

Debt Portfolio Yield: 14.2%, down from 16.8% quarter-over-quarter.

2Strategic Updates and Business Highlights

Portfolio Activity: Completed seven investments totaling $42.9 million in Q4, focusing on technology, healthcare, and consumer sectors.

Pending Acquisition: SWK Holdings acquisition expected to close in early April 2026, anticipated to diversify the portfolio and enhance capabilities in healthcare and life sciences.

Investment Strategy: Emphasis on maintaining a credit-first investment discipline, focusing on first-lien senior secured investments.

Pipeline Strength: Stronger pipeline compared to the previous year, driven by partnerships with BC Partners and SWK, with expectations for continued deal flow.

3Forward Guidance and Outlook

First Quarter 2026: Anticipated challenges due to a one-time charge from debt redemptions, expected to impact earnings.

Long-term Outlook: Optimistic about the potential for growth in 2026, with a focus on maintaining a defensive portfolio while seeking attractive investment opportunities.

Leverage Ratio: Expected to be just under 1.2x post-SWK acquisition, with a target range of 1.2x to 1.3x moving forward.

4Bad News, Challenges, or Points of Concern

Declining Metrics: Notable decreases in total investment income and NII compared to the previous year.

Prepayment Fee Income: Declined to more normalized levels, contributing to lower NII.

Market Conditions: Ongoing uncertainties related to interest rates, geopolitical conflicts, and economic conditions pose risks to future performance.

Single Loan on Nonaccrual: Domingo Healthcare loan marked at a significant discount, though it represents a small portion of the total portfolio.

5Notable Q&A Insights

Pipeline Composition: Stronger deal flow attributed to BC Partners, with expectations for at least one deal per quarter.

SWK Holdings Portfolio: Expected to include 13 loans with a fair value of around $235 million, enhancing the overall portfolio.

Stock Repurchase Program: Currently on hold due to the SWK acquisition, with plans to revisit post-acquisition.

Market Dynamics: Competitive pressures in software and consumer sectors noted, with a cautious approach to underwriting emphasized. Overall, while RWAY faces some headwinds and declining metrics, strategic initiatives such as the SWK acquisition and a strong pipeline provide a foundation for potential growth moving forward.