Yahoo Finance

• Core Earnings Per Share: $0.50 for Q1 2025.

• Annualized Return on Equity: 10%.

• Gross Commitments: $3.5 billion in Q1 2025, a 54% increase from the same period last year.

• GAAP Net Income Per Share: $0.36 for Q1 2025, compared to $0.55 in the prior quarter and $0.76 in Q1 2024.

• Weighted Average Yield on Debt and Other Income-Producing Securities: 10% at March 31, 2025.

• Total Portfolio at Fair Value: $27.1 billion at the end of Q1 2025.

• Debt-to-Equity Ratio: 0.98 times net of available cash.

• Quarterly Dividend: $0.48 per share for Q2 2025.

• Taxable Income Spillover: Estimated at $883 million or $1.29 per share available for distribution in 2025.

• Nonaccruals at Cost: 1.5%, down 20 basis points from the prior quarter.

• Portfolio Companies: 566 at the end of Q1 2025.

• Weighted Average LTM EBITDA Growth of Portfolio Companies: 12%.

• Leverage of Portfolio Companies: 5.7 times debt-to-EBITDA.

• Available Liquidity: Nearly $6.8 billion.

• Warning! GuruFocus has detected 10 Warning Signs with ARCC.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ares Capital Corp (NASDAQ:ARCC) reported solid first quarter results with $0.50 in core earnings, equating to an annualized return on equity of 10%.

• The company maintained strong credit quality with nonaccrual loans and lower risk-rated credits at historically low levels.

• ARCC ended the quarter with conservative balance sheet leverage and significant dry powder, totaling nearly $6.8 billion, to make new investments.

• The company declared a $0.48 per share quarterly dividend for the second quarter of 2025, marking its 63rd consecutive quarter of stable or increasing regular quarterly dividends.

• ARCC's portfolio companies reported double-digit organic LTM EBITDA growth and are levered on a debt-to-EBITDA basis below the five-year average.

Negative Points

• GAAP net income per share decreased to $0.36 for the first quarter of 2025 from $0.55 in the prior quarter and $0.76 in the first quarter of 2024.

• Core earnings per share declined from $0.55 in the prior quarter to $0.50, largely driven by a decline in portfolio yields due to lower average market base rates.

• The weighted average yield on total investments at amortized cost decreased slightly, indicating potential pressure on future interest income.

• The company faces increased market volatility and tightening credit conditions, with banks transitioning into a risk-off position.

• There is uncertainty regarding the impact of tariffs on portfolio companies, with a mid-single-digit share of the portfolio potentially exposed to higher tariffs.