Hercules Capital announces Q3 earnings per share of 49 cents, surpassing consensus estimate of 48 cents.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 30 2025
0mins
Should l Buy HTGC?
Record New Originations: Hercules has maintained a record-breaking pace of new debt and equity commitments throughout Q3 2025, with a total of $846.2 million in new commitments during the quarter.
Funding Achievements: The company reported record Q3 fundings of $504.6 million, contributing to year-to-date totals of $2.87 billion in gross originations and $1.75 billion in fundings.
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Analyst Views on HTGC
Wall Street analysts forecast HTGC stock price to rise
7 Analyst Rating
6 Buy
1 Hold
0 Sell
Strong Buy
Current: 15.650
Low
18.00
Averages
20.04
High
24.00
Current: 15.650
Low
18.00
Averages
20.04
High
24.00
About HTGC
Hercules Capital, Inc. is a specialty finance company. The Company is focused on providing financing solutions to venture capital-backed and institutional-backed companies in a variety of technology and life sciences industries. It is structured as an internally managed, non-diversified, closed-end investment company. Its business objectives are to increase its net income, net investment income, and net asset value, through its investments in primarily structured debt or senior secured debt instruments of venture capital-backed and institutional-backed companies across a variety of technology-related industries at attractive yields. It invests in a range of companies active in the technology industry sub-sectors characterized by products or services that require advanced technologies, including computer software and hardware, networking systems, semiconductors, telecommunications equipment and media, semiconductor capital equipment, information technology infrastructure and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Hercules HTGC Q4 2025 Earnings Call Transcript
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- Shareholder Distribution Plan: Despite challenges from declining interest rates, Hercules Capital achieved a 120% coverage of its quarterly base distribution in Q4, maintaining a $0.40 per share base distribution and announcing a $0.07 supplemental distribution for 2026, reflecting the company's ongoing commitment to shareholders.
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See More
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- Redemption Policy Change: The company replaced voluntary quarterly redemptions with mandated 'capital distributions', meaning future asset sales or earnings will fund redemption requests, which the market interpreted as a sign of redemption pressure, potentially leading to forced sales of higher-quality assets.
- Market Reaction and Confidence Crisis: Although Blue Owl executives stated that investors would receive about 30% of their funds back by March 31, market confidence in its liquidity management was shaken, with shares down over 50% in the past year, raising widespread concerns about the private credit market.
- Industry Outlook and Risks: With over 70% of loans concentrated in the software sector, Blue Owl BDC faces increasing tension between liquidity demands and asset illiquidity, leading to a more pessimistic market outlook, with some economists viewing it as a potential 'canary in the coal mine' for future financial crises.
See More
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- Asset Sale Impact: The firm sold $1.4 billion in loan assets from three private debt funds, particularly from the Blue Owl Capital Corporation II aimed at U.S. retail investors, which will cease quarterly redemption options, potentially signaling a bursting market bubble.
- Increasing Market Risks: Research indicates that institutional ownership of publicly traded business development companies (BDCs) has steadily declined to about 25% by 2023, highlighting the growing role of retail investors in providing equity capital, which may increase market fragility.
- Rising Default Risks: As investor unease grows over AI tools disrupting traditional enterprise software models, concerns in private credit have resurfaced, with market watchers warning of significant defaults ahead, particularly among high-yield loans.
See More
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- OBDC II Fund Dynamics: The OBDC II fund offloaded $600 million in loans, representing 34% of its $1.7 billion portfolio, which will end regular quarterly liquidity payments to investors, shifting to a more restrictive periodic payout model.
- Liquidity Challenges: This transition highlights the increasing liquidity and transparency issues faced by Blue Owl, restricting investors' ability to withdraw funds amid ongoing expansion into the retail wealth space by private asset managers.
- Shareholder Return Plan: Blue Owl intends to use the proceeds from this asset sale to pay down debt and return up to $2.35 per share to OBDC II shareholders, approximately 30% of the fund's net asset value, aiming to create value for shareholders while maintaining a diversified portfolio.
See More
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- Portfolio Expansion: The company set a new record with nearly $4 billion in originations for 2025, while assets under management surpassed $5.7 billion, marking over a 20% year-over-year increase, indicating enhanced competitiveness in the capital markets.
- Stable Dividend Policy: Despite market fluctuations, Hercules Capital maintained a quarterly base distribution of $0.40 per share with a 120% coverage ratio, demonstrating a commitment to shareholder returns and financial stability.
- Optimistic Future Outlook: Management anticipates a robust new business environment in 2026, particularly in strategic M&A and capital markets activities, reflecting ongoing confidence and investment in supporting the innovation economy.
See More
Hercules HTGC Q4 2025 Earnings Call Transcript
See More
Hercules Capital Reports Record Q4 2025 Earnings Performance
- Record Financing Commitments: Hercules Capital achieved record total debt and equity commitments of $1.06 billion in Q4 2025, driving nearly $4 billion in annual commitments, showcasing the company's strong financing capabilities and growth potential amid market volatility.
- Investment Income Growth: Total investment income reached $532.5 million in 2025, a 7.9% year-over-year increase, while net investment income stood at $341.7 million, up 4.9%, indicating sustained profitability in a stable credit environment.
- Shareholder Distribution Plan: Despite challenges from declining interest rates, Hercules Capital achieved a 120% coverage of its quarterly base distribution in Q4, maintaining a $0.40 per share base distribution and announcing a $0.07 supplemental distribution for 2026, reflecting the company's ongoing commitment to shareholders.
- Asset Management Scale Expansion: Hercules Capital's assets under management exceeded $5.7 billion at the end of 2025, a 20.5% increase, reflecting strong performance in the private credit market and proactive positioning for future market opportunities.
See More
