New Mountain Finance (NMFC) Q1 2025 earnings summary

Executive summary

• Q1 2025 adjusted net investment income was $0.32 per share, fully covering the $0.32 dividend; $1.5 million of incentive fees were waived to support dividend protection.

• Net asset value per share declined to $12.45 from $12.55, with stable credit performance and 96.5% of the portfolio rated green and no red-rated names.

• Portfolio fair value was $3,047.7 million across 119 companies, with a weighted average yield to maturity at cost of 10.7%.

• Board declared a Q2 2025 dividend of $0.32 per share, payable June 30, 2025, supported by recurring earnings and the dividend protection program through 2026.

• Share repurchase program of $47 million authorized through December 31, 2025; New Mountain employees and senior advisors own 13% of shares.

Financial highlights

• Total investment income for Q1 2025 was $85.7 million, down 5% year-over-year, with 96% recurring income.

• Net investment income per share was $0.32, down from $0.36 in Q1 2024.

• Net asset value at quarter-end was $1.34 billion, or $12.45 per share.

• Net expenses were $51 million, aided by a $1.5 million incentive fee waiver.

• Portfolio yield to maturity at cost was 10.7% as of March 31, 2025.

Outlook and guidance

• Dividend protection program is in place through 2026, with adviser pledging to reduce incentive fees as needed to maintain the $0.32 per share quarterly dividend.

• Management expects continued reduction in PIK income, targeting 10%-12% of total income.

• Focus remains on maintaining or increasing senior assets, optimizing cost of debt, and rotating non-yielding equity into cash-yielding assets.

• Management expects to meet liquidity needs with cash flows from operations and available credit facilities.

• Elevated base rates are expected to support core earnings power.