Ares Capital (ARCC) Q4 2024 earnings summary

Executive summary

• Leadership transition announced: Kort Schnabel to become CEO effective April 30, 2025, with Kipp deVeer stepping down but remaining on the board and investment committee.

• Reported strong Q4 and FY 2024 results, with stable credit performance and record investment activity supporting earnings and book value growth.

• Net asset value per share increased to $19.89 at year-end 2024 from $19.24 at year-end 2023, marking the eighth consecutive quarter of NAV growth.

• Over the past decade, the company delivered steady or increasing dividends, increased book value per share by over 20%, and generated $500 million in net realized gains.

• Declared a Q1 2025 dividend of $0.48 per share, continuing over 15 years of stable or growing dividends.

Financial highlights

• Q4 2024 GAAP net income per share was $0.55, down from $0.62 in Q3 and $0.72 in Q4 2023; full-year GAAP net income per share was $2.44, down from $2.75 in 2023.

• Core earnings per share for Q4 2024 were $0.55, compared to $0.58 in Q3 and $0.63 in Q4 2023; FY 2024 Core EPS was $2.33, slightly down from $2.37 in FY 2023.

• Portfolio at fair value reached $26.7 billion at year-end, up from $25.9 billion in Q3 and $22.9 billion a year ago.

• Weighted average yield on debt and income-producing securities was 11.1% at year-end, down from 11.7% in Q3 and 12.5% at end of 2023.

• Total assets reached $28.3 billion, up from $23.8 billion a year earlier.

Outlook and guidance

• Management expects a healthy economy and increased M&A activity in 2025, with direct lending volumes anticipated to rise.

• As of January 28, 2025, investment backlog was approximately $1.8 billion, primarily in first lien senior secured loans.

• Taxable income spillover estimated at $922 million, or $1.37 per share, providing visibility and stability for future dividends.

• Management expects an active investing market in 2025, with strong positioning for acquisition finance and growth capital opportunities.

• Declared a Q1 2025 dividend of $0.48 per share, consistent with Q4 2024.