Horizon Finance (HRZN) Q2 2026 earnings summary

Executive summary

• Completed merger with Monroe Capital Corporation in April, expanding the equity base and portfolio, with former MRCC stockholders now owning 29.86% of the combined company and incurring $4.4 million in non-recurring merger expenses.

• Focused on strengthening underwriting, credit capabilities, technology, and origination platform, with emphasis on secured debt investments in technology, life science, healthcare, and sustainability sectors.

• Debt investment portfolio grew for the third consecutive quarter, reaching $677 million, with a total portfolio of $676.7 million at quarter end.

• Actively building a robust pipeline of venture debt and small cap public company investments, with committed backlog increasing to $228 million.

• Net asset value per share ended at $6.23, down from $6.98 at December 31, 2025, due to unrealized losses on a single portfolio company.

Financial highlights

• Total investment income for Q2 2026 was $25.0 million, up from $24.5 million year-over-year.

• Net investment income for Q2 2026 was $7.4 million ($0.11 per share), down from $11.4 million ($0.28 per share) year-over-year, mainly due to merger costs.

• Debt investment portfolio at June 30, 2026: $648 million in debt, $17 million in warrants, $4 million in other investments, $8 million in equity, and $0.2 million in RoHo JV.

• Portfolio yield on debt investments was 14.9% for Q2 2026, among the highest in the BDC industry.

• Total expenses for Q2 were $17.4 million, up from $12.7 million in Q2 2025, mainly due to $4.4 million in one-time merger expenses.

Outlook and guidance

• Board declared regular and special monthly cash distributions totaling $0.27 per share for Q4 2026; undistributed spillover income as of June 30, 2026 was $0.33 per share.

• Management expects to leverage a stronger balance sheet and robust pipeline to grow the portfolio and deliver NII at or above declared distributions over time.

• Anticipate continued portfolio growth in Q3, supported by a strong pipeline and $228 million committed backlog.

• Management expects current cash, operations, and credit facilities to be sufficient for at least the next 12 months.