Hercules Capital Reports First Quarter 2024 Financial Results
Hercules Capital, Inc. (NYSE: HTGC) reported record Q1 2024 financial results with total gross debt and equity commitments up by 81.7%, gross fundings up by 27.1%, total investment income up by 15.7%, net investment income up by 20.9%, NII providing 125% coverage of base cash distribution, undistributed earnings spillover of $142.7 million, approximately $4.5 billion of assets under management, and conservative balance sheet management.
Record Q1 2024 total gross debt and equity commitments up by 81.7% year-over-year.
Q1 2024 total gross fundings increased by 27.1% year-over-year.
Total investment income for Q1 2024 rose by 15.7% year-over-year.
Net investment income for Q1 2024 increased by 20.9% year-over-year.
NII provides 125% coverage of the base cash distribution.
Undistributed earnings spillover of $142.7 million.
Approximately $4.5 billion of assets under management, up by 14.7% year-over-year.
Conservative balance sheet management with net GAAP leverage of 91.0% and net regulatory leverage of 81.7%.
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Insights
Hercules Capital's report indicating a significant year-over-year growth in total gross debt and equity commitments, as well as fundings, suggests a robust expansion in their financing operations, potentially reflecting a growing portfolio of venture capital investments. An increase of 81.7% in commitments is a substantial figure that could signal confidence from venture-backed companies in Hercules as a funding source. The reported 27.1% growth in fundings also implies a strong demand for capital from their client base.
Furthermore, the uptick in total investment income and net investment income (NII) by 15.7% and 20.9%, respectively, mirrors the company's effective revenue-generating strategies. The NII provides 125% coverage of the base cash distribution, a key metric for investors, as it indicates the company's ability to pay dividends from its income. A conservative balance sheet with net GAAP leverage at 91.0% and net regulatory leverage at 81.7% portrays a disciplined approach to risk management, which is important for maintaining stability. The undistributed earnings spillover signifies a robust reserve that could support future dividends or be reinvested.
Given these factors, the short-term outlook for Hercules Capital looks promising, given the company's solid financial performance and the potential for continued growth in assets under management, reported at
The performance of Hercules Capital must be contextualized within the broader sector of specialty finance companies. The substantial growth in total gross debt and equity commitments suggests that Hercules is outpacing industry norms, which typically indicates exceptional management or a competitive advantage in sourcing deals. The company's asset growth and its position as a leading financier to venture-backed companies present a narrative of strong market positioning and an attractive portfolio prospect for investors looking at the long-term horizon.
The undistributed earnings could be seen as a buffer or a strategic reserve for future investment opportunities or for protecting dividend payments in less favorable economic conditions. It would be interesting to observe the company's strategy in deploying these reserves, which could significantly impact investor returns and the company's growth trajectory. Hercules' ability to maintain a conservative leverage ratio in a rising interest rate environment also reflects positively on its balance sheet strength.
From an investor's perspective, the reported financial metrics from Hercules Capital are indicative of a company experiencing positive momentum, which might be seen as an auspicious sign for future earnings potential. Nevertheless, keen attention should be paid to the company's investment selection criteria and risk assessment protocols, as these will be critical in sustaining their growth and managing potential defaults or write-offs.
Record Q1 2024 Total Gross Debt and Equity Commitments of
Record Q1 2024 Total Gross Fundings of
Q1 2024 Total Investment Income of
Q1 2024 Net Investment Income “NII” of
Q1 2024 NII Provides
Conservative Balance Sheet Management with Net GAAP Leverage of
Undistributed Earnings Spillover of
Approximately
Footnotes:
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(2) |
Assets under management includes assets managed by Hercules Capital and the Adviser Subsidiary |
Conference Call
Hercules has scheduled its first quarter 2024 financial results conference call for May 2, 2024 at 2:00 p.m. PT (5:00 p.m. ET). To participate via telephone, please register here. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. While not required, it is recommended you join 10 minutes prior to the event start. A live webcast of the first quarter 2024 financial results conference call will also be available on the investor relations section of the Company’s website at investor.htgc.com. An archived webcast replay will be available on the Company's website for at least 30 days following the conference call.
About Hercules Capital, Inc.
Hercules Capital, Inc. (NYSE: HTGC) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than
Hercules, through its wholly owned subsidiary business, Hercules Adviser LLC (the “Adviser Subsidiary”), also maintains an asset management business through which it manages investments for external parties (“Adviser Funds”). The Adviser Subsidiary is registered as an investment adviser under the Investment Advisers Act of 1940.
Hercules’ common stock trades on the New York Stock Exchange (NYSE) under the ticker symbol “HTGC.” In addition, Hercules has one retail bond issuance of
Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We may use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may” and similar expressions to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and should not be relied upon in making any investment decision. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations. While we cannot identify all such risks and uncertainties, we urge you to read the risks discussed in our Annual Report on Form 10-K and other materials that we publicly file with the Securities and Exchange Commission. Any forward-looking statements made in this press release are made only as of the date hereof. Hercules assumes no obligation to update any such statements in the future.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240502497988/en/
Michael Hara
Investor Relations and Corporate Communications
Hercules Capital, Inc.
650-433-5578
mhara@htgc.com
Source: Hercules Capital, Inc.
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