Horizon Finance (HRZN) Q4 2025 earnings summary

Executive summary

• 2025 marked a transformative year, with groundwork laid for long-term growth despite macro and micro challenges, including a delayed merger with MRCC due to a government shutdown.

• The merger with MRCC, expected to close soon, will significantly increase equity capital and enable larger venture loans, leveraging Monroe Capital's support.

• Net investment income (NII) for Q4 2025 was $8.3 million ($0.18 per share), down from $10.4 million ($0.27 per share) year-over-year; full year NII totaled $44.4 million ($1.05 per share).

• Portfolio growth resumed in Q4, with $102.5 million in new loans funded and a committed backlog of $154 million.

• Net asset value (NAV) per share was $6.98 at year-end, down from $8.43 at the end of 2024.

Financial highlights

• Net investment income (NII) for Q4 was $0.18 per share; NAV per share ended at $6.98.

• Portfolio yield on debt investments exceeded 14% for Q4 and nearly 16% for the full year, among the highest in the BDC industry.

• Investment income for Q4 was $21 million, down from $24 million year-over-year, mainly due to lower interest income.

• Total expenses for Q4 were $12.5 million, with interest expense at $8 million and base management fee at $2.9 million.

• Net realized loss on investments for Q4 was $23.3 million ($0.52 per share); net unrealized appreciation was $24.7 million ($0.55 per share).

Outlook and guidance

• Board declared regular monthly distributions of $0.06 per share for April, May, and June 2026, aiming to deliver NII at or above declared distributions.

• Expectation to generate NII that covers distributions over time, supported by portfolio growth and predictive pricing.

• Advisor agreed to waive up to $4 million in fees over four quarters post-merger to support distributions.

• Management expects the increased committed backlog to support steady portfolio growth in 2026.

• Anticipated merger with MRCC expected to provide significant capital for larger venture lending transactions.