RWAY — Runway Growth Finance Corp.

Summary of Runway Growth Finance Corp. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Total Investment Income: $30 million, down from $36.7 million in Q4 2024.
• Net Investment Income (NII): $11.6 million, a decrease from $15.7 million in Q4 2024.
• NII per Share: $0.32; base dividend was $0.33 per share.
• Portfolio Fair Value: $927.4 million, a 2% decline from $946 million in 2024.
• Weighted Average Portfolio Risk Rating: Increased to 2.45 from 2.42.
• Debt Portfolio Yield: 14.2%, down from 16.8% quarter-over-quarter.
• Net Assets: $484.9 million, down from $489.5 million at the end of 2024.
• NAV per Share: $13.42, a decrease of 1% from $13.55.

2. Strategic Updates and Business Highlights

• Completed seven investments totaling $42.9 million in Q4, focusing on technology, healthcare, and consumer sectors.
• Announced the pending acquisition of SWK Holdings, expected to close in early April 2026, aimed at enhancing portfolio diversification, particularly in healthcare and life sciences.
• The company emphasized a disciplined investment approach, focusing on risk mitigation and portfolio optimization.
• Originations in Q1 2026 are showing a stronger pipeline compared to the previous year, driven by BC Partners' resources.

3. Forward Guidance and Outlook

• Anticipate continued strong deal flow and opportunities in technology and healthcare sectors.
• Expect modest earnings pressure in Q1 2026 due to a one-time charge related to debt redemptions.
• Post-acquisition of SWK, leverage is expected to be just under 1.2x, with a target range of 1.2x to 1.3x for future operations.
• The board declared a regular distribution of $0.33 per share for 2026, indicating confidence in earnings alignment with distribution levels.

4. Bad News, Challenges, or Points of Concern

• Decline in total investment income and NII compared to the previous year raises concerns about profitability.
• The weighted average portfolio risk rating increase suggests potential credit quality concerns.
• Prepayment fee income returned to normalized levels, contributing to lower NII.
• The company is navigating a competitive environment with aggressive terms from other investors, which may limit attractive investment opportunities.

5. Notable Q&A Insights

• Management expressed optimism about the deal flow, particularly from BC Partners, and indicated a strong pipeline for 2026.
• Concerns were raised about the potential dilution from the SWK acquisition due to stock price movements, though management reassured that the overall impact would be manageable.
• The CADMA joint venture is expected to yield its first distribution in Q2 2026, indicating ongoing efforts to enhance earnings power.
• Management acknowledged challenges in leveraging the portfolio effectively amid market volatility and prepayment dynamics.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, and notable concerns discussed during the earnings call, providing a balanced view of Runway Growth Finance Corp.'s performance and outlook.