Runway Growth Finance Corp. Reports Fourth Quarter and Fiscal Year 2024 Financial Results
Delivered Total and Net Investment Income of $33.8 million and $14.6 million, Respectively
Investment Portfolio of $1.1 billion
Conference Call Today, Thursday, March 20, 2025 at 5:00 p.m. ET
MENLO PARK, Calif., March 20, 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 fourth quarter and fiscal year ended December 31, 2024.
Fourth Quarter 2024 Highlights
Total investment income of $33.8 million
Net investment income of $14.6 million, or $0.39 per share
Net asset value of $514.9 million, or $13.79 per share
Dollar-weighted annualized yield on debt investments of 14.7% for the quarter
Two investments completed in new portfolio companies and five investments in existing portfolio companies, representing $154.0 million in funded investments
Aggregate proceeds of $152.6 million in principal prepayments and $2.4 million from scheduled amortizations
Repurchased 555,104 shares of the Company's outstanding common stock during the fourth quarter under previously authorized share repurchase program
Fiscal Year 2024 Highlights
Total investment portfolio of $1.1 billion at fair value
Net investment income of $63.8 million, or $1.64 per share
Net asset value of $514.9 million, or $13.79 per share
Total investment fundings of $330.5 million: $223.2 million in seven new portfolio companies, $101.7 million in nine existing portfolio companies, and $5.6 million in Runway-Cadma I LLC
Aggregate proceeds of $287.4 million in principal prepayments and $4.8 million from scheduled amortizations
Low credit loss ratio of an average 12 basis points per year on a gross basis and an average 10 basis points per year on a net (debt and equity) basis, based on cumulative commitments since inception
Repurchased 3,161,805 shares of the Company's outstanding common stock under previously authorized share repurchase programs
First Quarter 2025 Distributions
Declared first quarter 2025 regular dividend of $0.33 per share
Declared first quarter 2025 supplemental dividend of $0.03 per share
"In 2024, Runway Growth advanced its strategy to optimize our portfolio, enhance our origination channels, and expand our product set," said David Spreng, Founder and CEO of Runway Growth. "Notably, we believe the close of the combination between our investment adviser, Runway Growth Capital, and BC Partners Credit positions the Company to further diversify our go-forward composition and maximize the portfolio with attractive investment opportunities. Our stockholders and borrowers alike will benefit from the combined scale and expertise of our expanded platform as we seek to mitigate risk and drive heightened returns."
Spreng continued, "Our team's diligent underwriting and credit-first investment philosophy will drive the strength of our portfolio and enable our borrowers to perform against the dynamic macro environment taking shape in the year ahead."
Fourth Quarter 2024 Operating Results
Total investment income for the quarter ended December 31, 2024 was $33.8 million, compared to $39.2 million for the quarter ended December 31, 2023.
Net investment income for the quarter ended December 31, 2024 was $14.6 million, or $0.39 per share, compared to $18.3 million, or $0.45 per share, for the quarter ended December 31, 2023.
The Company's dollar-weighted annualized yield on average debt investments for the quarter ended December 31, 2024 was 14.7%. The Company calculates the yield on dollar-weighted debt investments for any period measured as (1) total investment-related income during the period divided by (2) the daily average of the fair value of debt investments, including investments on non-accrual status, outstanding during the period.
Total operating expenses for the quarter ended December 31, 2024 were $19.2 million, compared to $20.9 million for the quarter ended December 31, 2023.
Net realized loss on investments was $2.9 million for the quarter ended December 31, 2024, compared to a net realized loss of $17.2 million for the quarter ended December 31, 2023.
For the quarter ended December 31, 2024, net change in unrealized gain on investments was $16.5 million, compared to a net change in unrealized loss on investments of $5.9 million for the comparable prior year period.
Portfolio and Investment Activity
As of December 31, 2024, Runway Growth's investment portfolio had an aggregate fair value of approximately $1.1 billion in 56 portfolio companies and one joint venture, and was comprised of approximately $970.2 million in term loans, 97.9% of which are senior secured loans, and $106.6 million in warrants and other equity-related investments.
During the fourth quarter of 2024, Runway Growth funded two investments in new portfolio companies and five investments in existing portfolio companies, representing $80.1 million in funded loans, net of refinances and upfront loan origination fees.
Total portfolio investment activity for the three and twelve months ended December 31, 2024, and 2023 was as follows:
Three Months Ended December 31,
Year Ended December 31,
2024
2023
2024
2023
Beginning investment portfolio
$
1,066,100
$
1,010,927
$
1,067,009
$
1,126,309
Purchases of investments
80,077
94,937
254,106
200,464
Purchases of U.S. Treasury Bills
—
41,999
—
76,973
PIK interest
2,683
4,590
12,265
19,924
Sales and prepayments of investments
(81,736
)
(63,407
)
(226,397
)
(289,078
)
Scheduled repayments of investments
(2,400
)
(285
)
(4,780
)
(7,331
)
Sales and maturities of U.S. Treasury Bills
—
—
(42,029
)
(35,000
)
Amortization of fixed income premiums or accretion of discounts
(1,485
)
1,350
6,808
8,682
Net realized gain (loss) on investments
(2,939
)
(17,209
)
(2,939
)
(18,387
)
Net change in unrealized gain (loss) on investments
16,540
(5,893
)
12,797
(15,547
)
Ending investment portfolio
$
1,076,840
$
1,067,009
$
1,076,840
$
1,067,009
Net Asset Value
As of December 31, 2024, net asset value ("NAV") per share was $13.79, compared to $13.50 as of December 31, 2023. Total net assets at the end of the fourth quarter of 2024 was $514.9 million, down 5.9% from $547.1 million as of December 31, 2023.
For the quarter ended December 31, 2024, our net increase in net assets resulting from operations was $28.2 million, or $0.75 per share, compared to a net decrease in net assets resulting from operations of $4.8 million, or $0.12 per share, for the quarter ended December 31, 2023.
Liquidity and Capital Resources
As of December 31, 2024, the Company had approximately $244.8 million in available liquidity, including unrestricted cash and cash equivalents of $5.8 million and $239.0 million in available borrowing capacity under the Company's credit facility, subject to existing terms, advance rates and regulatory and covenant requirements.
The Company ended the quarter with a core leverage ratio of approximately 108%, compared to 95% for the quarter ended December 31, 2023.
Distributions
On March 20, 2025, the Company's board of directors (the "Board of Directors") declared a regular quarterly distribution of $0.33 per share and a supplemental distribution of $0.03 per share for the first quarter of 2025, each payable on April 14, 2025, to stockholders of record as of March 31, 2025.
Share Repurchase Program
On November 2, 2023, the Board of Directors approved a share repurchase program (the "Second Repurchase Program"), under which the Company was authorized to repurchase up to $25.0 million of its outstanding shares of common stock, at management's discretion from time to time in open-market transactions and in accordance with all applicable securities laws and regulations. The Company repurchased 1,961,938 shares in connection with the Second Repurchase Program for an aggregate purchase price of $23.5 million. The Second Repurchase Program expired on November 2, 2024.
On July 30, 2024, the Board of Directors approved a share repurchase program (the "Third Repurchase Program") under which the Company may repurchase up to $15.0 million of its outstanding shares of common stock, at management's discretion from time to time in open-market transactions and in accordance with all applicable securities laws and regulations. If not renewed, the Third Repurchase Program will terminate upon the earlier of (i) July 30, 2025 or (ii) the repurchase of $15.0 million of the Company's shares of common stock. As of December 31, 2024, the Company had repurchased 1,199,867 shares in connection with the Third Repurchase Program for an aggregate purchase price of $12.5 million.
Recent Developments
The Company evaluated events subsequent to December 31, 2024 through March 20, 2025, the date the consolidated financial statements were issued.
BCP Transaction
On January 30, 2025, Runway Growth Capital LLC (the "Adviser") was acquired by certain private investment funds advised by BC Partners Credit and Mount Logan Capital Inc., pursuant to its minority investment (the "BCP Transaction"). On January 23, 2025, the Company's stockholders approved an amended and restated advisory agreement (the "Third Amended and Restated Advisory Agreement") between the Company and the Adviser at a special meeting of stockholders. The Third Amended and Restated Advisory Agreement was entered into in connection with the termination of the former advisory agreement, which terminated automatically in accordance with its terms as a result of the BCP Transaction. The Third Amended and Restated Advisory Agreement took effect upon the closing of the BCP Transaction on January 30, 2025. Other than the date and term of the agreement, there were no changes to the terms of the Third Amended and Restated Advisory Agreement.
Board of Directors
As previously disclosed, Gregory M. Share informed the Board of Directors on November 15, 2024 of his intent to resign as a director of the Company, effective upon the appointment of a director to fill the vacancy created by his resignation. In connection with the stockholder agreement between the Company and OCM Growth Holdings, LLC ("OCM Growth"), OCM Growth submitted Catherine Frey as a replacement nominee for consideration by the Board of Directors. Mr. Share's resignation was not due to any disagreements with the Company relating to the Company's operations, policies or practices. The Board of Directors appointed Catherine Frey to serve on the Board of Directors for the remainder of Mr. Share's term as a Class III director, effective on January 23, 2025.
On March 13, 2025, John F. Engel informed the Board of Directors of his intent to resign as a director of the Company, effective upon the appointment of a director to fill the vacancy created by his resignation. Mr. Engel's resignation was not due to any disagreements with the Company's operations, policies, or practices. The Board of Directors appointed Jennifer Kwon Chou to serve on the Board of Directors for the remainder of Mr. Engel's term as a Class II director, effective on March 21, 2025.
On March 13, 2025, the Board of Directors increased the size of the Board of Directors from five members to eight members. The Board of Directors appointed the following individuals to serve on the Board of Directors, effective on March 21, 2025:
Alexander Duka was appointed to serve on the Board of Directors as an independent Class I director for a term expiring at the Company's 2026 annual meeting of stockholders.
Ted Goldthorpe was appointed to serve as an interested Class II director for a term expiring at the Company's 2027 annual meeting of stockholders.
Robert Warshauer was appointed to serve as an independent Class III director for a term expiring at the Company's 2026 annual meeting of stockholders.
Credit Facility
On March 18, 2025, the Company entered into a Sixth Amendment (the "Credit Agreement Amendment") to the Amended and Restated Credit Agreement dated as of April 20, 2022 (the "Credit Agreement"), among the Company, as borrower; the financial institutions parties thereto as lenders (the "Lenders"); KeyBank National Association, as administrative agent for the Lenders; CIBC Bank USA, as ...
