Ares Capital Corporation · NASDAQ:ARCC
Ares Capital — Q1 2025 Earnings Presentation
28 slides from Ares Capital's earnings presentation, Apr 29, 2025
Slide 1: First Quarter 2025 Earnings Presentation
First Quarter 2025 Earnings Presentation
Slide 2: Important Notice
Important Notice This presentation has been prepared for Ares Capital Corporation (“Ares Capitalˮ) for the benefit of its public stockholders. This presentation is solely for information purposes in connection with evaluating the business, operations and financial results of Ares Capital. This prese
Slide 3: Financial and Portfolio Highlights
Financial and Portfolio Highlights Financial Highlights Q1-25 Q4-24 Q1-24 (1) GAAP Net Income Per Share $ 0.36 $ 0.55 $ 0.76 Core EPS*(2) $ 0.50 $ 0.55 $ 0.59 (1) Net Investment Income Per Share $ 0.54 $ 0.55 $ 0.55 Net Realized Losses Per Share(1) $ (0.09) $ (0.03) $ (0.05) (1) Net Unrealized (Loss
Slide 4: Selected Historical Financial Information
Selected Historical Financial Information As of and for the Three Months Ended (dollar amounts in millions, except per share data and stock prices) 3/31/25 12/31/24 9/30/24 6/30/24 3/31/24 GAAP Net Income Per Share(1) $ 0.36 $ 0.55 $ 0.62 $ 0.52 $ 0.76 Core EPS*(2) $ 0.50 $ 0.55 $ 0.58 $ 0.61 $ 0.59
Slide 5: Selected Historical Financial Information (cont'd)
Selected Historical Financial Information (cont’d) As of (dollar amounts in millions) 3/31/25 12/31/24 9/30/24 6/30/24 3/31/24 Investments at Fair Value $ 27,130 $ 26,720 $ 25,918 $ 24,973 $ 23,124 Number of Portfolio Companies(11) 566 550 535 525 510 Asset Class (at fair value): First Lien Senior S
Slide 6: Selected Historical Financial Information (cont'd)
Selected Historical Financial Information (cont’d) For the Three Months Ended (dollar amounts in millions) 3/31/25 12/31/24 9/30/24 6/30/24 3/31/24 Commitments: Gross Commitments(3) $ 3,453 $ 3,751 $ 3,919 $ 3,857 $ 3,554 Exits of Commitments(4) (2,857) (2,715) (2,598) (1,376) (3,414) Net Commitment
Slide 7: Quarterly Operating Results
Quarterly Operating Results For the Three Months Ended (amounts in millions, except per share data) 3/31/25 12/31/24 9/30/24 6/30/24 3/31/24 Investment income $ 732 $ 759 $ 775 $ 755 $ 701 Expenses 360 387 402 356 369 Net investment income before income taxes 372 372 373 399 332 Income tax expense,
Slide 8: Quarterly Operating Results Detail
Quarterly Operating Results Detail For the Three Months Ended (amounts in millions) 3/31/25 12/31/24 9/30/24 6/30/24 3/31/24 Net Investment Income Before Income Taxes: Investment Income: Interest income from investments $ 526 $ 542 $ 568 $ 539 $ 513 Capital structuring service fees 46 48 38 58 28 Di
Slide 9: Quarterly Gain/Loss Detail
Quarterly Gain/Loss Detail For the Three Months Ended (amounts in millions) 3/31/25 12/31/24 9/30/24 6/30/24 3/31/24 Net Realized and Unrealized Gains (Losses): Realized gains (losses) on investments: Gains $ 46 $ 49 $ 72 $ 164 $ 42 Losses (138) (84) (91) (166) (46) Net realized losses on investment
Slide 10: Quarterly Balance Sheets
Quarterly Balance Sheets As of (amounts in millions, except per share data) 3/31/25 12/31/24 9/30/24 6/30/24 3/31/24 ASSETS Investments at fair value $ 27,130 $ 26,720 $ 25,918 $ 24,973 $ 23,124 Cash and cash equivalents 647 635 486 601 509 Restricted cash 95 225 138 80 68 Interest receivable 239 29
Slide 11: Investment Portfolio by Issuer as of March 31, 2025
Investment Portfolio by Issuer as of March 31, 2025* Top 15 7.0% Investments 25.1% (14) 4.1% Ivy Hill Asset Management, L.P. (13) 1.6% Senior Direct Lending Program, LLC 1.5% Potomac Intermediate Holdings II LLC 1.3% 1.2% Neptune Bidco US Inc. 1.1% High Street Buyer, Inc. and High Street Holdco LLC
Slide 12: Investment Portfolio as of March 31, 2025
Investment Portfolio as of March 31, 2025* Asset Class Industry 10% 4% 2% 2% 3% 24% 7% 3% 3% 4% 10% 4% 58% 5% 5% 13% 4% 5% 6% 5% 6% 10% 7% First Lien Senior Secured Loans(12) Software and Services Senior Direct Lending Program(13) Second Lien Senior Secured Loans Health Care Equipment and Services I
Slide 13: Portfolio Activity
Portfolio Activity Gross Commitments by Asset Class Exits of Commitments by Asset Class 100% 1% 1% 100% 1% 1% 2% 2% 1% 1% 2% 1% 2% 3% 1% 6% 2% 7% 8% 5% 3% 7% 2% 1% 3% 6% 1% 1% 4% 3% 1% 1% 3% 2% 2% 1% 2% 1% 3% 4% 3% 1% 5% 6% 1% 14% 80% 80% 18% 19% 12% 35% 60% 60% 93% 92% 88% 89% 88% 40% 40% 78% 71% 7
Slide 14: Portfolio Company EBITDA and Credit Statistics
Portfolio Company EBITDA and Credit Statistics 12.0x $400.0 10.0x $317.9 $317.7 $297.3 $289.6 $300.0 $274.0 8.0x ($ Millions) 6.0x 5.9x 5.8x 5.8x $200.0 5.7x 5.7x $162.2 $164.8 $159.9 $159.7 $162.9 4.0x $100.0 2.0x 1.8x 1.9x 1.9x 1.6x 1.6x 0.0x $0.0 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 * Portfolio Weighted
Slide 15: Portfolio By Grade
Portfolio By Grade(23) % by Fair Value % by Number of Companies 100% 100% 12% 11% 11% 12% 12% 19% 16% 17% 18% 19% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 77% 78% 80% 78% 79% 80% 80% 79% 77% 78% 40% 40% 30% 30% 20% 20% 10% 10% 6% 6% 5% 6% 5% 3% 1% 3% 1% 2% 1% 2% 1% 2% 1% 5% 5% 4% 4% 4% 0% 0% Q1-24 Q2
Slide 16: Loans on Non-Accrual Status
Loans on Non-Accrual Status Amortized Cost Fair Value 5.0% $500 5.0% $500 $439 $414 $397 4.0% $400 4.0% $400 $360 $323 3.0% $300 3.0% $300 ($ Millions) ($ Millions) $254 $244 2.0% $200 2.0% $177 $200 $168 $166 1.7% 1.7% 1.5% 1.5% 1.0% 1.3% $100 1.0% $100 1.0% 0.9% 0.7% 0.7% 0.6% 0.0% $0 0.0% $0 Q1-2
Slide 17: Investment Activity from April 1, 2025 through April 24, 2025
Investment Activity from April 1, 2025 through April 24, 2025 Ares Capital made approximately $492 million of new investment commitments • 87% were in first lien senior secured loans, 6% were in subordinated certificates of the SDLP, 3% were in senior subordinated loans and 4% were in other equity •
Slide 18: Investment Backlog
Investment Backlog • As of April 24, 2025, Ares Capital had a backlog of approximately $2.6 billion(24) • The following is a breakdown of the backlog by asset class and by industry Asset Class Industry 5% 9% 3% 17% 2% 5% 1% 7% 7% 15% 89% 8% 12% 9% 11% First Lien Senior Secured Loans(12) Health Care
Slide 19: Debt Summary
Debt Summary As of 12/31/24 As of 3/31/25 Aggregate Aggregate Weighted Principal Carrying Principal Carrying Average Amount Principal Value of Amount Principal Value of Stated Committed/ Amount Outstanding Committed/ Amount Outstanding Interest (dollar amounts in millions) Outstanding(26) Outstandin
Slide 20: Debt Summary
Debt Summary Debt Maturities* ($ in millions) $6,000 $5,000 $4,000 $785 (29) $3,000 $2,404 (29) $28 (29) $2,000 $1,700 $41 (29) $70 (29) ** $1,000 $2,150 $1,850 $1,250 $1,400 $1,250 $1,020 (30) $0 2025 $— 2026 $— 2027 — 2028 2029 Thereafter As of March 31, 2025 Secured Revolving Facilities Debt Secu
Slide 21: Quarterly Dividends
Quarterly Dividends $0.60 $0.50 $0.03 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.48 $0.03 $0.03 $0.03 $0.43 $0.40 $0.42 $0.42 $0.41 $0.41 $0.40 $0.30 $0.20 $0.10 $0.00 (31) Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Regul
Slide 22: Corporate Data
Corporate Data Board of Directors Investment Committee Corporate Officers Research Coverage Corporate Counsel MICHAEL AROUGHETI MARK AFFOLTER MICHAEL AROUGHETI BANK OF AMERICA MERRILL LYNCH KIRKLAND & ELLIS LLP Executive Vice President of Ares Capital Partner, U.S. Direct Lending Director and Execut
Slide 23: Reconciliations of GAAP Net Income Per Share to Core EPS
Reconciliations of GAAP Net Income Per Share to Core EPS The following are reconciliations of net income per share computed in accordance with GAAP to core earnings per share: For the Three Months Ended 3/31/25 12/31/24 9/30/24 6/30/24 3/31/24 (1) GAAP net income per share $ 0.36 $ 0.55 $ 0.62 $ 0.5
Slide 24: Endnotes
Endnotes 1) Per share amounts and weighted average shares outstanding are basic and diluted. The basic and diluted weighted average shares outstanding for the three months ended March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024 were approximately 676 million, 65
Slide 25: Endnotes (cont'd)
Endnotes (cont'd) 10) Excludes realized and unrealized gains (losses), incentive fee attributable to net realized and unrealized gains (losses) and income tax expense, including excise taxes. Fixed charges include interest and credit facility fees expense and amortization of debt issuance costs. 11)
Slide 26: Endnotes (cont'd)
Endnotes (cont'd) 21) The interest coverage ratio represents portfolio companies' LTM EBITDA as a multiple of implied annualized cash interest expense based on the borrowing levels and market rates at quarter end. The portfolio weighted average interest coverage ratio is weighted based on the fair v
Slide 27: Endnotes (cont'd)
Endnotes (cont'd) 29) See Note 5 to Ares Capital's consolidated financial statements included in the quarterly report on Form 10-Q for the quarter ended March 31, 2025 for more information regarding each of Ares Capital's secured revolving facilities. See Note 15 to Ares Capital's consolidated finan
Slide 28: Ares Capital Corporation
OD ARES ARES CAPITAL CORPORATION