Horizon Finance (HRZN) Q3 2025 earnings summary

Executive summary

• Announced a merger with Monroe Capital Corporation (MRCC), expected to close in early 2026 pending shareholder approval, which will significantly increase assets under management and provide greater economies of scale, with ongoing support from Monroe Capital.

• Net investment income for Q3 2025 was $14.0 million ($0.32 per share), up from $11.8 million in Q3 2024, with NAV per share at $7.12 as of September 30, 2025.

• Total investment income for Q3 2025 rose 7.1% year-over-year to $26.3 million, driven by higher interest and fee income.

• Declared regular monthly distributions totaling $0.33 per share through March 2026, supported by strong portfolio yield and spillover income.

• Added several new originators in Q3, aiming to originate larger venture loans and return to historical growth trajectory.

Financial highlights

• Net investment income per share was $0.32 (basic and diluted) for Q3 2025; net increase in net assets from operations per share was $0.71 (basic).

• Net asset value per share was $7.12 at September 30, 2025, down from $8.43 at December 31, 2024.

• Portfolio at fair value was $603.5 million, with debt investments comprising 92.9% of the portfolio.

• Dollar-weighted annualized yield on debt investments for Q3 2025 was 18.6%, up from 15.9% in Q3 2024.

• Total assets at September 30, 2025 were $759.2 million, down from $821.8 million at year-end 2024.

Outlook and guidance

• Board declared monthly distributions of $0.11 per share for Q4 2025 and Q1 2026, with future distribution levels to be reassessed in February 2026 based on Q4 results and the impact of the anticipated merger.

• Expect to grow the portfolio in Q4, with a strong pipeline and $50 million in new venture loan commitments already awarded for Q4.

• Management expects the MRCC merger and Monroe Capital relationship to position the company for larger venture lending transactions and portfolio growth.

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