TriplePoint Venture Growth BDC Corp. Announces Second Quarter 2024 Financial Results

Rhea-AI Summary

TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) announced its Q2 2024 financial results and declared a Q3 2024 distribution of $0.30 per share. Key highlights include:

- Signed $188.4 million in term sheets, a 44% increase from Q1
- Closed $52.0 million in new debt commitments, up 420% from Q1
- Funded $38.7 million in debt investments, a 186% increase from Q1
- Received $97.0 million from liquidity events
- Achieved 15.8% weighted average annualized portfolio yield on debt investments
- Earned net investment income of $12.6 million, or $0.33 per share
- Generated total investment income of $27.1 million
- Net asset value of $353.0 million, or $8.83 per share

The company renewed its Revolving Credit Facility, extending the revolving period to November 2025 and maturity to May 2027, with total commitments set at $300 million.

Positive

• Signed term sheets increased 44% to $188.4 million from previous quarter
• New debt commitments increased 420% to $52.0 million from previous quarter
• Debt investment funding increased 186% to $38.7 million from previous quarter
• Received $97.0 million from liquidity events
• Achieved 15.8% weighted average annualized portfolio yield on debt investments
• Renewed Revolving Credit Facility with extended terms and $300 million commitment

Negative

• Net investment income decreased to $12.6 million ($0.33 per share) from $18.8 million ($0.53 per share) in Q2 2023
• Total investment income decreased to $27.1 million from $35.2 million in Q2 2023
• Net asset value per share decreased to $8.83 from $9.21 at the end of 2023
• Recognized net realized losses on investments of $18.8 million

Increase in Signed Term Sheets, Closed Commitments and Fundings

Received $97.0 million from Liquidity Events

Renews Revolving Credit Facility

Declares Third Quarter 2024 Distribution of $0.30 per Share

MENLO PARK, Calif.--(BUSINESS WIRE)-- TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the “Company,” “TPVG,” “we,” “us,” or “our”), the leading financing provider to venture growth stage companies backed by a select group of venture capital firms in technology and other high growth industries, today announced its financial results for the second quarter ended June 30, 2024 and the declaration by its Board of Directors of its third quarter 2024 distribution of $0.30 per share.

Second Quarter 2024 Highlights

• Signed $188.4 million of term sheets with venture growth stage companies at TriplePoint Capital LLC (“TPC”), representing a 44% increase from the prior quarter, and TPVG closed $52.0 million of new debt commitments to venture growth stage companies, representing a 420% increase from the prior quarter;
• Funded $38.7 million in debt investments, representing an increase of 186% from the prior quarter, to five portfolio companies with a 15.5% weighted average annualized yield at origination;
• Received $97.0 million from liquidity events comprised of $51.2 million of loan principal prepayments, $27.9 million of scheduled principal amortization, $14.7 million in cash proceeds from the disposition of debt investments and $3.2 million in cash proceeds from the sale of warrant and equity investments;
• Achieved a 15.8% weighted average annualized portfolio yield on debt investments for the quarter¹;
• Earned net investment income of $12.6 million, or $0.33 per share;
• Generated total investment income of $27.1 million;
• Realized an 14.6% return on average equity, based on net investment income during the quarter;
• Nine debt portfolio companies raised an aggregate $442.6 million of capital in private financings during the quarter;
• Held debt investments in 44 portfolio companies, warrants in 94 portfolio companies and equity investments in 46 portfolio companies as of June 30, 2024;
• Debt investment portfolio weighted average investment ranking of 2.24 as of quarter’s end;
• Raised $18.2 million of net proceeds under the at-the-market equity offering program (“ATM Program”);
• Net asset value of $353.0 million, or $8.83 per share, as of June 30, 2024;
• Total liquidity of $340.7 million (giving effect to the Revolving Credit Facility renewal post quarter-end) and total unfunded commitments of $71.4 million;
• Ended the quarter with a 1.15x gross leverage ratio;
• Declared a second quarter distribution of $0.30 per share, payable on September 30, 2024; bringing total declared distributions to $15.75 per share since the Company’s initial public offering; and
• Subsequent to the end of the quarter, the Company renewed its Revolving Credit Facility to, among other things, extend the revolving period to November 30, 2025 and the scheduled maturity date to May 30, 2027, as well as set total commitments to $300 million.

Year to Date 2024 Highlights

• Earned net investment income of $28.1 million, or $0.74 per share;
• Generated total investment income of $56.4 million;
• Paid distributions of $0.80 per share;
• Signed $318.8 million of term sheets with venture growth stage companies at TPC and TPVG closed $62.0 million of new debt commitments to venture growth stage companies;
• Funded $52.2 million in debt investments to seven portfolio companies with a 15.2% weighted average annualized portfolio yield at origination;
• 16 portfolio companies raised an aggregate $1.0 billion of capital in private financings;
• Achieved a 15.6% weighted average annualized portfolio yield on total debt investments ¹ ;
• In April 2024, DBRS, Inc. issued TPVG’s investment grade rating, with a BBB (low) Long-Term Issuer rating, with a stable trend outlook;
• Raised $19.4 million of net proceeds under the ATM Program; and
• Estimated undistributed taxable earnings from net investment income (or “spillover income”) of $39.3 million, or $0.98 per share, as of June 30, 2024.

_____________

1 Please see the last table in this press release, titled "Weighted Average Portfolio Yield on Debt Investments," for more information on the calculation of the weighted average annualized portfolio yield on debt investments.

“Given continued challenges in the venture capital markets, we remained on our path of selectively increasing our investment activity and positioning TPVG for the future,” said Jim Labe, chairman and chief executive officer of TPVG. “We are pleased with the notable increase in signed term sheets, closed debt commitments and funding activity during the quarter and remained focused on proactively managing and diversifying our portfolio, and preparing for improving market conditions.”

“During the quarter, we took steps to build a strong foundation for the future,“ said Sajal Srivastava, president and chief investment officer of the Company. “We enter the second half of the year with strong liquidity, an improved leverage ratio, a growing pipeline, a meaningful portfolio of warrant and equity investments and a dividend aligned with the earnings power of our portfolio.”

PORTFOLIO AND INVESTMENT ACTIVITY

During the three months ended June 30, 2024, the Company entered into $52.0 million of new debt commitments with five portfolio companies, funded debt investments totaling $38.7 million to five portfolio companies and acquired warrants valued at $0.3 million in six portfolio companies. Debt investments funded during the quarter carried a weighted average annualized portfolio yield of 15.5% at origination. During the quarter, the Company received $51.2 million of principal prepayments, $27.9 million of scheduled principal amortization and $14.7 million from disposition of debt investments. The weighted average annualized portfolio yield on debt investments for the second quarter was 15.8%. The Company calculates weighted average portfolio yield as the annualized rate of the interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The return on average equity for the second quarter was 14.6% based on net investment income. The Company calculates return on average equity as the annualized rate of net investment income recognized during the period divided by the Company’s average net asset value during the period.

As of June 30, 2024, the Company held debt investments in 44 portfolio companies, warrants in 94 portfolio companies and equity investments in 46 portfolio companies. The total cost and fair value of these investments were $745.6 million and $713.8 million, respectively.

The following table shows the total portfolio investment activity for the three and six months ended June 30, 2024 and 2023:

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
(in thousands)		2024				2023				2024				2023
Beginning portfolio at fair value		$	773,605			$	982,828			$	802,145			$	949,276
New debt investments, net(a)			37,727				30,164				50,882				86,538
Scheduled principal amortization			(27,884	)			(1,666	)			(34,696	)			(18,257	)
Principal prepayments and early repayments			(51,239	)			(33,750	)			(82,081	)			(37,150	)
Net amortization and accretion of premiums and discounts and end-of-term payments			2,185				4,172				2,589				9,490
Payment-in-kind coupon			3,821				2,597				7,609				4,682
New warrant investments			271				38				436				168
New equity investments			404				433				800				936
Proceeds from dispositions of investments			(21,036	)			(3,173	)			(22,142	)			(3,173	)
Net realized gains (losses) on investments			(18,943	)			1,863				(27,894	)			1,863
Net change in unrealized gains (losses) on investments			14,859				(41,551	)			16,122				(52,418	)
Ending portfolio at fair value		$	713,770			$	941,955			$	713,770			$	941,955
_____________
(a) Debt balance is net of fees and discounts applied to the loan at origination.

SIGNED TERM SHEETS

During the three months ended June 30, 2024, TPC entered into $188.4 million of non-binding term sheets to venture growth stage companies. These opportunities are subject to underwriting conditions including, but not limited to, the completion of due diligence, negotiation of definitive documentation and investment committee approval, as well as compliance with the allocation policy. Accordingly, there is no assurance that any or all of these transactions will be completed or assigned to the Company.

UNFUNDED COMMITMENTS

As of June 30, 2024, the Company’s unfunded commitments totaled $71.4 million, of which $5.0 million was dependent upon portfolio companies reaching certain milestones. Of the $71.4 million of unfunded commitments, $5.0 million will expire during 2024, $65.9 million will expire during 2025, and $0.5 million will expire during 2026, if not drawn prior to expiration. Since these commitments may expire without being drawn, unfunded commitments do not necessarily represent future cash requirements or future earning assets for the Company.

RESULTS OF OPERATIONS

Total investment and other income was $27.1 million for the second quarter of 2024, representing a weighted average annualized portfolio yield of 15.8% on debt investments, as compared to $35.2 million and 14.7% for the second quarter of 2023. The decrease in total investment and other income was primarily due to a lower weighted average principal amount outstanding on our income-bearing debt investment portfolio. For the six months ended June 30, 2024, the Company’s total investment and other income was $56.4 million, as compared to $68.8 million for the six months ended June 30, 2023, representing a weighted average annualized portfolio yield on total debt investments of 15.6% and 14.7%, respectively.

Operating expenses for the second quarter of 2024 were $14.5 million as compared to $16.3 million for the second quarter of 2023. Operating expenses for the second quarter of 2024 consisted of $8.7 million of interest expense and amortization of fees, which includes $1.8 million of one-time fees related to minimum utilization on the Revolving Credit Facility, $3.8 million of base management fees, $0.6 million of administration agreement expenses and $1.3 million of general and administrative expenses. Due to the total return requirement under the income component of our incentive fee structure, our income incentive fees were reduced by $2.5 million during the three months ended June 30, 2024. Operating expenses for the second quarter of 2023 consisted of $9.9 million of interest expense and amortization of fees, $4.5 million of base management fees, $0.6 million of administration agreement expenses and $1.3 million of general and administrative expenses. Due to the total return requirement under the income component of our incentive fee structure, our income incentive fees were reduced by $3.8 million during the three months ended June 30, 2023. The Company’s total operating expenses were $28.3 million and $31.4 million for the six months ended June 30, 2024 and 2023, respectively.

For the second quarter of 2024, the Company recorded net investment income of $12.6 million, or $0.33 per share, as compared to $18.8 million, or $0.53 per share, for the second quarter of 2023. The decrease in net investment income between periods was driven primarily by lower total investment and other income.

During the second quarter of 2024, the Company recognized net realized losses on investments of $18.8 million, consisting primarily of $20.2 million of net realized losses on the debt investment portfolio from the write-off and restructuring of investments, partially offset by $1.3 million of net warrant and equity gains from the sale and dispositions of investments. During the second quarter of 2023, the Company recognized net realized gains on investments of $1.9 million.

Net change in unrealized gains on investments for the second quarter of 2024 was $14.9 million, consisting of $12.8 million of net unrealized gains on the warrant and equity portfolio resulting from fair value adjustments and $10.9 million of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period, offset by $8.8 million of net unrealized losses on the existing debt investment portfolio resulting from fair value adjustments. Net change in unrealized losses on investments for the second quarter of 2023 was $41.6 million. The Company’s net realized and unrealized losses were $11.5 million for the six months ended June 30, 2024, compared to net realized and unrealized losses of $50.6 million for the six months ended June 30, 2023.

The Company’s net increase in net assets resulting from operations for the second quarter of 2024 was $8.6 million, or $0.22 per share, as compared to a net decrease in net assets resulting from operations of $20.9 million, or $0.59 per share, for the second quarter of 2023. For the six months ended June 30, 2024, the Company’s net increase in net assets resulting from operations was $16.6 million, or $0.43 per share, as compared to a net decrease in net assets resulting from operations of $13.2 million, or $0.37 per share, for the six months ended June 30, 2023.

CREDIT QUALITY

The Company maintains a credit watch list with portfolio companies placed into one of five credit categories, with Clear, or 1, being the highest rating and Red, or 5, being the lowest. Generally, all new loans receive an initial grade of White, or 2, unless the portfolio company’s credit quality meets the characteristics of another credit category.

As of June 30, 2024, the weighted average investment ranking of the Company’s debt investment portfolio was 2.24, as compared to 2.21 at the end of the prior quarter. During the quarter ended June 30, 2024, portfolio company credit category changes, excluding fundings and repayments, consisted of the following: one portfolio company with a principal balance of $25.0 million was upgraded from White (2) to Clear (1), one portfolio company with a principal balance of $4.7 million was downgraded from Clear (1) to White (2), one portfolio company with a principal balance of $13.0 million was downgraded from White (2) to Yellow (3), one portfolio company with a principal balance of $12.3 million was downgraded from White (2) to Orange (4), one portfolio company with a principal balance of $24.7 million was downgraded from Yellow (3) to Orange (4), and one portfolio company with a principal balance of $0.7 million was downgraded from Yellow (3) to Red (5).

The following table shows the credit categories for the Company’s debt investments at fair value as of June 30, 2024 and December 31, 2023:

		June 30, 2024								December 31, 2023
Credit Category (dollars in thousands)		Fair Value			Percentage of Total Debt Investments			Number of Portfolio Companies		Fair Value			Percentage of Total Debt Investments			Number of Portfolio Companies
Clear (1)		$	61,473		10.0	%		4		$	100,309		13.8	%		7
White (2)			400,272		65.0			27			471,195		64.5			28
Yellow (3)			95,768		15.6			6			117,792		16.1			8
Orange (4)			58,087		9.4			6			40,091		5.5			5
Red (5)			56		—			1			908		0.1			1
		$	615,656		100.0	%		44		$	730,295		100.0	%		49

NET ASSET VALUE

As of June 30, 2024, the Company’s net assets were $353.0 million, or $8.83 per share, as compared to $346.3 million, or $9.21 per share, as of December 31, 2023.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2024, the Company had total liquidity of $340.7 million, consisting of cash, cash equivalents and restricted cash of $50.7 million and available capacity under its Revolving Credit Facility of $290.0 million (adjusted for renewal of the Revolving Credit Facility on August 6, 2024). As of June 30, 2024, the Company held $0.5 million of stock and warrant positions in publicly traded companies. The Company ended the quarter with a 1.15x gross leverage ratio and an asset coverage ratio of 187%.

The Company maintains an ATM Program with UBS Securities LLC, providing for the issuance from time to time of shares of its common stock. As of June 30, 2024, $56.5 million in shares remained available for sale under the ATM Program.

DISTRIBUTION

On July 31, 2024, the Company’s board of directors declared a regular quarterly distribution of $0.30 per share for the third quarter, payable on September 30, 2024 to stockholders of record as of September 16, 2024. As of June 30, 2024, the Company had estimated spillover income of $39.3 million, or $0.98 per share.

RECENT DEVELOPMENTS

Since June 30, 2024 and through August 6, 2024:

• TPC’s direct originations platform entered into $56.0 million of additional non-binding signed term sheets with venture growth stage companies;
• The Company closed $11.0 million of additional debt commitments;
• The Company funded $6.3 million in new investments;
• On August 2, 2024, the Company’s board of directors appointed Matthew Galiani to serve as interim Chief Financial Officer of the Company, effective as of the close of business on August 9, 2024. Mr. Galiani joined the Company in 2019 and has served as the Company’s Controller since December 2022; and
• Subsequent to the end of the quarter, the Company renewed its Revolving Credit Facility to, among other things, extend the revolving period to November 30, 2025 and the scheduled maturity date to May 30, 2027, as well as set total commitments to $300 million.

CONFERENCE CALL

The Company will host a conference call at 5:00 p.m. Eastern Time, today, August 7, 2024, to discuss its financial results for the quarter ended June 30, 2024. To listen to the call, investors and analysts should dial (844) 826-3038 (domestic) or +1 (412) 317-5184 (international) and ask to join the TriplePoint Venture Growth BDC Corp. call. Please dial in at least five minutes before the scheduled start time. A replay of the call will be available through September 7, 2024, by dialing (877) 344-7529 (domestic) or +1 (412) 317-0088 (international) and entering conference ID 5227745. The conference call also will be available via a live audio webcast in the investor relations section of the Company’s website, https://www.tpvg.com. An online archive of the webcast will be available on the Company’s website for one year after the call.

ABOUT TRIPLEPOINT VENTURE GROWTH BDC CORP.

TriplePoint Venture Growth BDC Corp. is an externally-managed business development company focused on providing customized debt financing with warrants and direct equity investments to venture growth stage companies in technology and other high growth industries backed by a select group of venture capital firms. The Company’s sponsor, TriplePoint Capital, is a Sand Hill Road-based global investment platform which provides customized debt financing, leasing, direct equity investments and other complementary solutions to venture capital-backed companies in technology and other high growth industries at every stage of their development with unparalleled levels of creativity, flexibility and service. For more information about TriplePoint Venture Growth BDC Corp., visit https://www.tpvg.com. For more information about TriplePoint Capital, visit https://www.triplepointcapital.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release constitute forward-looking statements. Forward-looking statements are not guarantees of future performance, investment activity, financial condition or results of operations and involve a number of substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. Actual events, investment activity, performance, condition or results may differ materially from those in the forward-looking statements as a result of a number of factors, including as a result of changes in economic, market or other conditions, and the impact of such changes on the Company’s and its portfolio companies’ results of operations and financial condition, and those factors described from time to time in the Company’s filings with the Securities and Exchange Commission. More information on these risks and other potential factors that could affect actual events and the Company’s performance and financial results, including important factors that could cause actual results to differ materially from plans, estimates or expectations included herein or discussed on the webcast/conference call, is or will be included in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

TriplePoint Venture Growth BDC Corp.
Consolidated Statements of Assets and Liabilities
(in thousands, except per share data)
	June 30, 2024				December 31, 2023
Assets	(unaudited)
Investments at fair value (amortized cost of $745,644 and $850,142, respectively)	$	713,770			$	802,145
Cash and cash equivalents		50,434				153,328
Restricted cash		241				18,254
Deferred credit facility costs		2,507				2,714
Prepaid expenses and other assets		4,316				2,384
Total assets	$	771,268			$	978,825
Liabilities
Revolving Credit Facility	$	10,000			$	215,000
2025 Notes, net		69,843				69,738
2026 Notes, net		199,262				199,041
2027 Notes, net		124,257				124,117
Other accrued expenses and liabilities		14,929				24,623
Total liabilities	$	418,291			$	632,519
Net assets
Preferred stock, par value $0.01 per share (50,000 shares authorized; no shares issued and outstanding, respectively)	$	—			$	—
Common stock, par value $0.01 per share		399				376
Paid-in capital in excess of par value		514,023				492,934
Total distributable earnings (loss)		(161,445	)			(147,004	)
Total net assets	$	352,977			$	346,306
Total liabilities and net assets	$	771,268			$	978,825
Shares of common stock outstanding (par value $0.01 per share and 450,000 authorized)		39,953				37,620
Net asset value per share	$	8.83			$	9.21

TriplePoint Venture Growth BDC Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2024				2023				2024				2023
	(unaudited)				(unaudited)				(unaudited)				(unaudited)
Investment income
Interest income from investments	$	26,590			$	34,501			$	55,118			$	66,754
Other income		517				650				1,263				2,025
Total investment and other income	$	27,107			$	35,151			$	56,381			$	68,779
Operating expenses
Base management fee	$	3,832			$	4,496			$	8,134			$	8,807
Income incentive fee		—				—				—				—
Interest expense and amortization of fees		8,702				9,944				15,713				19,189
Administration agreement expenses		648				567				1,259				1,140
General and administrative expenses		1,321				1,307				3,148				2,227
Total operating expenses	$	14,503			$	16,314			$	28,254			$	31,363
Net investment income	$	12,604			$	18,837			$	28,127			$	37,416
Net realized and unrealized gains/(losses)
Net realized gains (losses) on investments	$	(18,846	)		$	1,859			$	(27,653	)		$	1,826
Net change in unrealized gains (losses) on investments		14,859				(41,551	)			16,122				(52,418	)
Net realized and unrealized gains/(losses)	$	(3,987	)		$	(39,692	)		$	(11,531	)		$	(50,592	)
Net increase (decrease) in net assets resulting from operations	$	8,617			$	(20,855	)		$	16,596			$	(13,176	)
Per share information (basic and diluted)
Net investment income per share	$	0.33			$	0.53			$	0.74			$	1.06
Net increase (decrease) in net assets per share	$	0.22			$	(0.59	)		$	0.43			$	(0.37	)
Weighted average shares of common stock outstanding		38,729				35,398				38,189				35,373
Total distributions declared per share	$	0.40			$	0.40			$	0.80			$	0.80

Weighted Average Portfolio Yield
on Debt Investments
Ratios (Percentages, on an annualized basis)(1)		For the Three Months Ended June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
Weighted average portfolio yield on debt investments(2)		15.8	%		14.7	%		15.6	%		14.7	%
Coupon income		11.6	%		11.8	%		11.9	%		11.8	%
Accretion of discount		0.8	%		0.7	%		0.9	%		0.9	%
Accretion of end-of-term payments		1.5	%		1.6	%		1.5	%		1.7	%
Impact of prepayments during the period		1.9	%		0.6	%		1.3	%		0.3	%

_____________
(1)		Weighted average portfolio yields on debt investments for periods shown are the annualized rates of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The calculation of weighted average portfolio yields on debt investments excludes any non-income producing debt investments, but includes debt investments on non-accrual status. The weighted average yields reported for these periods are annualized and reflect the weighted average yields to maturities.
(2)		The weighted average portfolio yields on debt investments reflected above do not represent actual investment returns to the Company’s stockholders.

 

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INVESTOR RELATIONS AND MEDIA CONTACT

The IGB Group

Leon Berman

212-477-8438

lberman@igbir.com

Source: TriplePoint Venture Growth BDC Corp.

FAQ

What was TPVG's net investment income for Q2 2024?

TPVG's net investment income for Q2 2024 was $12.6 million, or $0.33 per share.

How much did TPVG declare in Q3 2024 distribution?

TPVG declared a Q3 2024 distribution of $0.30 per share.

What was TPVG's net asset value as of June 30, 2024?

TPVG's net asset value was $353.0 million, or $8.83 per share, as of June 30, 2024.

How much did TPVG receive from liquidity events in Q2 2024?

TPVG received $97.0 million from liquidity events in Q2 2024.