Runway Growth Finance Corp. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

Delivered Total and Net Investment Income of $33.8 million and $14.6 million, Respectively Investment Portfolio of $1.1 billion Conference Call Today, Thursday, March 20, 2025 at 5:00 p.m. ET MENLO PARK, Calif., March 20, 2025 (GLOBE NEWSWIRE) -- Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the “Company”), a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2024. Fourth Quarter 2024 Highlights Total investment income of $33.8 millionNet investment income of $14.6 million, or $0.39 per shareNet asset value of $514.9 million, or $13.79 per shareDollar-weighted annualized yield on debt investments of 14.7% for the quarterTwo investments completed in new portfolio companies and five investments in existing portfolio companies, representing $154.0 million in funded investmentsAggregate proceeds of $152.6 million in principal prepayments and $2.4 million from scheduled amortizationsRepurchased 555,104 shares of the Company's outstanding common stock during the fourth quarter under previously authorized share repurchase program Fiscal Year 2024 Highlights Total investment portfolio of $1.1 billion at fair valueNet investment income of $63.8 million, or $1.64 per shareNet asset value of $514.9 million, or $13.79 per shareTotal investment fundings of $330.5 million: $223.2 million in seven new portfolio companies, $101.7 million in nine existing portfolio companies, and $5.6 million in Runway-Cadma I LLCAggregate proceeds of $287.4 million in principal prepayments and $4.8 million from scheduled amortizationsLow credit loss ratio of an average 12 basis points per year on a gross basis and an average 10 basis points per year on a net (debt and equity) basis, based on cumulative commitments since inceptionRepurchased 3,161,805 shares of the Company's outstanding common stock under previously authorized share repurchase programs First Quarter 2025 Distributions Declared first quarter 2025 regular dividend of $0.33 per shareDeclared first quarter 2025 supplemental dividend of $0.03 per share “In 2024, Runway Growth advanced its strategy to optimize our portfolio, enhance our origination channels, and expand our product set,” said David Spreng, Founder and CEO of Runway Growth. “Notably, we believe the close of the combination between our investment adviser, Runway Growth Capital, and BC Partners Credit positions the Company to further diversify our go-forward composition and maximize the portfolio with attractive investment opportunities. Our stockholders and borrowers alike will benefit from the combined scale and expertise of our expanded platform as we seek to mitigate risk and drive heightened returns.” Spreng continued, “Our team’s diligent underwriting and credit-first investment philosophy will drive the strength of our portfolio and enable our borrowers to perform against the dynamic macro environment taking shape in the year ahead.” Fourth Quarter 2024 Operating Results Total investment income for the quarter ended December 31, 2024 was $33.8 million, compared to $39.2 million for the quarter ended December 31, 2023. Net investment income for the quarter ended December 31, 2024 was $14.6 million, or $0.39 per share, compared to $18.3 million, or $0.45 per share, for the quarter ended December 31, 2023. The Company's dollar-weighted annualized yield on average debt investments for the quarter ended December 31, 2024 was 14.7%. The Company calculates the yield on dollar-weighted debt investments for any period measured as (1) total investment-related income during the period divided by (2) the daily average of the fair value of debt investments, including investments on non-accrual status, outstanding during the period. Total operating expenses for the quarter ended December 31, 2024 were $19.2 million, compared to $20.9 million for the quarter ended December 31, 2023. Net realized loss on investments was $2.9 million for the quarter ended December 31, 2024, compared to a net realized loss of $17.2 million for the quarter ended December 31, 2023. For the quarter ended December 31, 2024, net change in unrealized gain on investments was $16.5 million, compared to a net change in unrealized loss on investments of $5.9 million for the comparable prior year period. Portfolio and Investment Activity As of December 31, 2024, Runway Growth’s investment portfolio had an aggregate fair value of approximately $1.1 billion in 56 portfolio companies and one joint venture, and was comprised of approximately $970.2 million in term loans, 97.9% of which are senior secured loans, and $106.6 million in warrants and other equity-related investments. During the fourth quarter of 2024, Runway Growth funded two investments in new portfolio companies and five investments in existing portfolio companies, representing $80.1 million in funded loans, net of refinances and upfront loan origination fees. Total portfolio investment activity for the three and twelve months ended December 31, 2024, and 2023 was as follows: Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Beginning investment portfolio$1,066,100 $1,010,927 $1,067,009 $1,126,309 Purchases of investments 80,077 94,937 254,106 200,464 Purchases of U.S. Treasury Bills — 41,999 — 76,973 PIK interest 2,683 4,590 12,265 19,924 Sales and prepayments of investments (81,736) (63,407) (226,397) (289,078)Scheduled repayments of investments (2,400) (285) (4,780) (7,331)Sales and maturities of U.S. Treasury Bills — — (42,029) (35,000)Amortization of fixed income premiums or accretion of discounts (1,485) 1,350 6,808 8,682 Net realized gain (loss) on investments (2,939) (17,209) (2,939) (18,387)Net change in unrealized gain (loss) on investments 16,540 (5,893) 12,797 (15,547)Ending investment portfolio$1,076,840 $1,067,009 $1,076,840 $1,067,009 Net Asset Value As of December 31, 2024, net asset value ("NAV") per share was $13.79, compared to $13.50 as of December 31, 2023. Total net assets at the end of the fourth quarter of 2024 was $514.9 million, down 5.9% from $547.1 million as of December 31, 2023. For the quarter ended December 31, 2024, our net increase in net assets resulting from operations was $28.2 million, or $0.75 per share, compared to a net decrease in net assets resulting from operations of $4.8 million, or $0.12 per share, for the quarter ended December 31, 2023. Liquidity and Capital Resources As of December 31, 2024, the Company had approximately $244.8 million in available liquidity, including unrestricted cash and cash equivalents of $5.8 million and $239.0 million in available borrowing capacity under the Company’s credit facility, subject to existing terms, advance rates and regulatory and covenant requirements. The Company ended the quarter with a core leverage ratio of approximately 108%, compared to 95% for the quarter ended December 31, 2023. Distributions On March 20, 2025, the Company’s board of directors (the "Board of Directors") declared a regular quarterly distribution of $0.33 per share and a supplemental distribution of $0.03 per share for the first quarter of 2025, each payable on April 14, 2025, to stockholders of record as of March 31, 2025. Share Repurchase Program On November 2, 2023, the Board of Directors approved a share repurchase program (the "Second Repurchase Program"), under which the Company was authorized to repurchase up to $25.0 million of its outstanding shares of common stock, at management’s discretion from time to time in open-market transactions and in accordance with all applicable securities laws and regulations. The Company repurchased 1,961,938 shares in connection with the Second Repurchase Program for an aggregate purchase price of $23.5 million. The Second Repurchase Program expired on November 2, 2024. On July 30, 2024, the Board of Directors approved a share repurchase program (the "Third Repurchase Program") under which the Company may repurchase up to $15.0 million of its outstanding shares of common stock, at management's discretion from time to time in open-market transactions and in accordance with all applicable securities laws and regulations. If not renewed, the Third Repurchase Program will terminate upon the earlier of (i) July 30, 2025 or (ii) the repurchase of $15.0 million of the Company's shares of common stock. As of December 31, 2024, the Company had repurchased 1,199,867 shares in connection with the Third Repurchase Program for an aggregate purchase price of $12.5 million. Recent Developments The Company evaluated events subsequent to December 31, 2024 through March 20, 2025, the date the consolidated financial statements were issued. BCP Transaction On January 30, 2025, Runway Growth Capital LLC (the "Adviser") was acquired by certain private investment funds advised by BC Partners Credit and Mount Logan Capital Inc., pursuant to its minority investment (the "BCP Transaction"). On January 23, 2025, the Company’s stockholders approved an amended and restated advisory agreement (the "Third Amended and Restated Advisory Agreement") between the Company and the Adviser at a special meeting of stockholders. The Third Amended and Restated Advisory Agreement was entered into in connection with the termination of the former advisory agreement, which terminated automatically in accordance with its terms as a result of the BCP Transaction. The Third Amended and Restated Advisory Agreement took effect upon the closing of the BCP Transaction on January 30, 2025. Other than the date and term of the agreement, there were no changes to the terms of the Third Amended and Restated Advisory Agreement. Board of Directors As previously disclosed, Gregory M. Share informed the Board of Directors on November 15, 2024 of his intent to resign as a director of the Company, effective upon the appointment of a director to fill the vacancy created by his resignation. In connection with the stockholder agreement between the Company and OCM Growth Holdings, LLC ("OCM Growth"), OCM Growth submitted Catherine Frey as a replacement nominee for consideration by the Board of Directors. Mr. Share’s resignation was not due to any disagreements with the Company relating to the Company’s operations, policies or practices. The Board of Directors appointed Catherine Frey to serve on the Board of Directors for the remainder of Mr. Share’s term as a Class III director, effective on January 23, 2025. On March 13, 2025, John F. Engel informed the Board of Directors of his intent to resign as a director of the Company, effective upon the appointment of a director to fill the vacancy created by his resignation. Mr. Engel's resignation was not due to any disagreements with the Company's operations, policies, or practices. The Board of Directors appointed Jennifer Kwon Chou to serve on the Board of Directors for the remainder of Mr. Engel’s term as a Class II director, effective on March 21, 2025. On March 13, 2025, the Board of Directors increased the size of the Board of Directors from five members to eight members. The Board of Directors appointed the following individuals to serve on the Board of Directors, effective on March 21, 2025: Alexander Duka was appointed to serve on the Board of Directors as an independent Class I director for a term expiring at the Company's 2026 annual meeting of stockholders.Ted Goldthorpe was appointed to serve as an interested Class II director for a term expiring at the Company's 2027 annual meeting of stockholders.Robert Warshauer was appointed to serve as an independent Class III director for a term expiring at the Company's 2026 annual meeting of stockholders. Credit Facility On March 18, 2025, the Company entered into a Sixth Amendment (the "Credit Agreement Amendment") to the Amended and Restated Credit Agreement dated as of April 20, 2022 (the "Credit Agreement"), among the Company, as borrower; the financial institutions parties thereto as lenders (the "Lenders"); KeyBank National Association, as administrative agent for the Lenders; CIBC Bank USA, as documentation agent; MUFG Bank, Ltd., as co-documentation agent; and U.S. Bank Trust Company, National Association, as collateral custodian and paying agent. The Credit Agreement Amendment amended the Credit Agreement to, among other things, (i) extend the maturity date and revolving period; (ii) permit future financing subsidiaries, and (iii) amend certain other terms of the Credit Agreement, including without limitation loan eligibility criteria, the borrowing base calculation, and excess concentration measures. Recent Portfolio Activity From January 1, 2025 through March 20, 2025, the Company completed $2.7 million of additional debt commitments, of which $2.7 million was funded upon closing. In addition, the Company funded $13.0 million in previously unfunded commitments on existing investments. The Company also received $25.6 million in debt prepayments and $37.4 million in proceeds from the sale of equity and warrant positions. Conference Call Runway Growth will hold a conference call to discuss its fourth quarter and fiscal year ended December 31, 2024, financial results at 2:00 p.m. PT (5:00 p.m. ET) on Thursday, March 20, 2025. To participate in the conference call or webcast, participants should register online at the Runway Investor Relations website. The earnings call can also be accessed through the following links: Conference CallWebcast A live webcast will be available in the investor section of the Company’s website, and will be archived for 90 days following the call. About Runway Growth Finance Corp. Runway Growth is a growing specialty finance company focused on providing flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity. Runway Growth is a closed-end investment fund that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. Runway Growth is externally managed by Runway Growth Capital LLC, an established registered investment advisor that was formed in 2015 and led by industry veteran David Spreng. For more information, please visit www.runwaygrowth.com. Forward-Looking Statements Statements included herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Runway Growth’s filings with the Securities and Exchange Commission. Runway Growth undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release. Important Disclosures Strategies described involve special risks that should be evaluated carefully before a decision is made to invest. Not all of the risks and other significant aspects of these strategies are discussed herein. Please see a more detailed discussion of these risk factors and other related risks in the Company’s most recent annual report on Form 10-K in the section entitled “Risk Factors”, which may be obtained on the Company’s website, www.runwaygrowth.com, or the SEC’s website, www.sec.gov. IR Contacts: Taylor Donahue, Prosek Partners, tdonahue@prosek.com Thomas B. Raterman, Chief Financial Officer and Chief Operating Officer, tr@runwaygrowth.com RUNWAY GROWTH FINANCE CORP.Consolidated Statements of Assets and Liabilities(In thousands, except share and per share data) December 31, 2024 December 31, 2023 Assets Investments at fair value: Non-control/non-affiliate investments at fair value (cost of $1,038,135 and $1,005,024, respectively)$1,005,328 $972,604 Affiliate investments at fair value (cost of $59,198 and $58,861, respectively) 64,572 51,456 Control investments at fair value (cost of $6,550 and $950, respectively) 6,940 950 Investment in U.S. Treasury Bills at fair value (cost of $0 and $42,014, respectively) — 41,999 Total investments at fair value (cost of $1,103,883 and $1,106,849, respectively) 1,076,840 1,067,009 Cash and cash equivalents 5,751 2,970 Interest and fees receivable 8,141 8,269 Other assets 623 905 Total assets 1,091,355 1,079,153 Liabilities Debt: Credit facility 311,000 272,000 2026 Notes 95,000 95,000 2027 Notes 152,250 152,250 Unamortized deferred financing costs (5,918) (9,172)Total debt, less unamortized deferred financing costs 552,332 510,078 Incentive fees payable 14,106 12,500 Interest payable 7,743 6,764 Accrued expenses and other liabilities 2,305 2,740 Total liabilities 576,486 532,082 Net assets Common stock, par value 373 414 Additional paid-in capital 557,992 605,110 Accumulated undistributed (overdistributed) earnings (43,496) (47,637)Treasury stock — (10,816)Total net assets$514,869 $547,071 Shares of common stock outstanding ($0.01 par value, 100,000,000 shares authorized) 37,347,428 40,509,269 Net asset value per share$13.79 $13.50 RUNWAY GROWTH FINANCE CORP.Consolidated Statements of Operations(In thousands, except share and per share data) Three Months Ended December 31, Years Ended December 31, 2024 2023 2024 2023 Investment income From non-control/non-affiliate investments: Interest income$29,402 $32,743 $127,045 $136,912 Payment-in-kind interest income 2,794 4,667 12,088 20,083 Dividend income 318 318 318 1,279 Fee income 542 757 2,231 3,342 From affiliate investments: Interest income 611 604 2,419 2,090 Payment-in-kind interest income — — — — Fee income — — — 15 From control investments: Interest income — — — — Payment-in-kind interest income — — — — Other income 112 136 531 488 Total investment income 33,779 39,225 144,632 164,209 Operating expenses Management fees 3,931 4,113 15,694 16,711 Incentive fees 2,292 4,052 14,579 19,046 Interest and other debt financing expenses 11,120 10,371 44,226 43,143 Professional fees 756 846 2,199 2,350 Administration agreement expenses 478 478 1,986 2,125 Insurance expense 201 223 829 1,028 Tax expense 390 614 392 664 Other expenses (10) 211 976 867 Total operating expenses 19,158 20,908 80,881 85,934 Net investment income 14,621 18,317 63,751 78,275 Net realized and net change in unrealized gain (loss) on investments Net realized gain (loss) on non-control/non-affiliate investments, including U.S. Treasury Bills (2,939) (196) (2,939) (1,374)Net realized gain (loss) on control investments — (17,013) — (17,013)Net realized gain (loss) on investments, including U.S. Treasury Bills (2,939) (17,209) (2,939) (18,387)Net change in unrealized gain (loss) on non-control/non-affiliate investments, including U.S. Treasury Bills 10,810 (12,984) (372) (20,491)Net change in unrealized gain (loss) on affiliate investments 5,516 741 12,779 (4,938)Net change in unrealized gain (loss) on control investments 214 6,350 390 9,882 Net change in unrealized gain (loss) on investments, including U.S. Treasury Bills 16,540 (5,893) 12,797 (15,547)Net realized and unrealized gain (loss) on investments 13,601 (23,102) 9,858 (33,934)Net increase (decrease) in net assets resulting from operations$28,222 $(4,785) $73,609 $44,341 Net investment income per common share (basic and diluted)$0.39 $0.45 $1.64 $1.93 Net increase (decrease) in net assets resulting from operations per common share (basic and diluted)$0.75 $(0.12) $1.89 $1.09 Weighted average shares outstanding (basic and diluted) 37,465,536 40,509,269 38,852,271 40,509,269

Runway Growth Finance Corp. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

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