Horizon Finance (HRZN) Q2 2026 earnings summary

Executive summary

• Completed merger with Monroe Capital Corporation in April 2026, expanding equity capital by $141 million and incurring $4.4 million in non-recurring merger expenses; former MRCC stockholders now own 29.86% of the combined company.

• Focused on secured debt investments in technology, life sciences, healthcare, and sustainability sectors, with a strategy to generate attractive risk-adjusted returns and capital appreciation via warrants.

• Formed a $100 million joint venture, RoHo Capital, with Roth Capital Partners.

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

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

Financial highlights

• Debt investment portfolio grew for the third consecutive quarter, reaching $676.7 million with a 14.9% annualized yield as of June 30, 2026.

• Total investment income for Q2 2026 was $25 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.

• Net asset value per share at June 30, 2026 was $6.23, down from $6.98 at December 31, 2025, impacted by unrealized losses on a single portfolio company.

• Distributions declared per share were $0.27 for Q2 2026 and $0.45 for the six months ended June 30, 2026.

Outlook and guidance

• Board declared regular and special monthly cash distributions for Q3 and Q4 2026; per share undistributed spillover income as of June 30, 2026 was $0.33.

• Management expects to leverage a stronger balance sheet and robust pipeline to drive long-term value and portfolio growth, supported by $228 million committed backlog and $464 million available investment capacity.

• Expectation to deliver NII at or above declared distributions over time as capital from the merger is deployed.

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