FSK Earning Date, Transcript Summary & Report

Stable Quarterly Distribution: FSK maintained a stable quarterly distribution of $0.64 per share and a supplemental distribution of $0.06 per share for 2025, demonstrating commitment to providing consistent income to investors.

Net Investment Income Beat: In Q1 2025, FSK generated net investment income of $0.67 per share, exceeding public guidance of approximately $0.66 per share, indicating strong financial performance.

Strong Liquidity Position: The company ended the quarter with approximately $3.2 billion of available liquidity, showcasing a solid liquidity position.

Strongest Origination Quarter: FSK originated approximately $2 billion of new investments in Q1 2025, marking the strongest origination quarter since 2022, despite a sluggish M&A market.

Portfolio EBITDA Analysis: The weighted average EBITDA of FSK's portfolio companies was $255 million, with a median EBITDA of $120 million, reflecting the quality of the portfolio.

EBITDA Growth Performance: Portfolio companies reported a weighted average year-over-year EBITDA growth rate of approximately 10%, indicating strong underlying business performance.

Non-Accruals Improvement: Non-accruals represented only 3.5% of the portfolio on a cost basis, a slight improvement from the previous quarter, suggesting effective risk management.

Successful Portfolio Exits: The company successfully exited two portfolio companies at par, demonstrating effective portfolio management and risk mitigation strategies.

Asset-Based Finance Appeal: FSK's asset-based finance portfolio is viewed as particularly compelling during periods of market volatility, providing diversification benefits.

Healthy Investment Returns: The weighted average yield on accruing debt investments was 10.8%, indicating a healthy return on investments.

Market Volatility Challenges: Economic outlook has worsened, leading to increased volatility in debt and equity markets, which poses challenges for investors seeking stability.

Net Investment Income Miss: The company reported net investment income of $0.67 per share, slightly below public guidance of $0.66 per share, indicating a miss in expected performance.

Asset Quality Deterioration: Non-accruals represented 3.5% of the portfolio on a cost basis, which is a slight increase from 3.7% in the previous quarter, suggesting a deterioration in asset quality.

Non-Accrual Investments Update: Two investments were added to non-accrual status during the quarter, indicating potential issues with portfolio companies.

Debt Investment Yield Decline: The weighted average yield on accruing debt investments decreased to 10.8%, down 20 basis points from the previous quarter, reflecting pressure on income generation.

Investment Income Decline: Total investment income decreased by $7 million quarter-over-quarter, primarily due to fewer days in the quarter and lower spreads on new originations, indicating a decline in revenue.

Guidance Variance and Uncertainty: The company expects greater variance in guidance categories due to current economic factors, suggesting uncertainty in future performance.

Net Asset Value Decline: The net asset value per share decreased to $23.37, down from $23.64 in the previous quarter, reflecting a decline in the overall value of the investment portfolio.