Executive Summary

NII per share of $0.36 covered the base dividend and modestly beat S&P Global consensus by ~5% (consensus $0.343*) while total investment income of $56.1m beat revenue consensus by ~3.6% (consensus $54.1m*) . The company declared a Q2 2025 base distribution of $0.36 per share, unchanged .
GAAP EPS was a loss of $(0.80), driven by net unrealized losses of $64.3m, producing a net decrease in net assets from operations of $(42.7)m; this was far below S&P Global “Net Income Normalized” consensus ($18.2m*) and reflects equity marks rather than core earnings .
NAV fell 7.5% q/q to $14.28, primarily from fair value marks in a few holdings (notably David’s Bridal and Anthem Sports); non‑accruals improved to 1.20% of fair value and first‑lien exposure remained 87% .
Balance sheet economics improved: weighted average debt cost fell to ~7.5% q/q and the new three‑year UBS facility cut spread by 45 bps (SOFR+2.75% vs SOFR+3.20%), while share repurchases continued (185,862 shares at $11.68) .

What Went Well and What Went Wrong

What Went Well

Dividend coverage and expense discipline: NII of $19.3m ($0.36/sh) covered the $0.36 base distribution; operating expenses fell to $36.8m on lower interest expense and prior debt repositioning .
Credit and portfolio mix resilient: non‑accruals improved to 1.20% of fair value and ~87% of the book is first‑lien; >98% of the portfolio risk‑rated 3 or better .
Strategic positioning and selectivity: “We continue to see opportunities on the direct lending side… remain highly selective… flex into wherever we see the greatest risk‑adjusted returns while preserving our conservative first lien focus,” said Co‑CEO Mark Gatto . Weighted average yield for new funded first‑lien debt was ~SOFR+6.3% .

What Went Wrong

NAV decline and equity marks: NAV per share fell 7.5% q/q to $14.28 due to mark‑to‑market declines, concentrated in David’s Bridal (dilution from new financing for the “Pearl” marketplace) and Anthem Sports (model shift to variable/advertising revenues) .
GAAP volatility: Net unrealized losses of $64.3m drove GAAP EPS to $(0.80), overshadowing strong NII; management highlighted macro volatility and equity book sensitivity .
Slight yield compression and higher leverage: portfolio yield dipped to 12.13% (amortized cost) from 12.28%, and net debt‑to‑equity rose to 1.39x (post‑April 1.34x) amid lower‑than‑expected late‑March repayments and NAV decline .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Total Investment Income ($USD Millions)	$59.627	$57.894	$56.074
Net Investment Income per Share ($)	$0.40	$0.35	$0.36
GAAP Earnings per Share ($)	$(0.01)	$0.10	$(0.80)
NAV per Share ($)	$15.73	$15.43	$14.28
Net Debt-to-Equity (x)	1.18x	1.27x	1.39x
Non-Accruals (% of FV)	1.85%	1.41%	1.20%
Yield on Debt & Other Income-Producing Investments (Amortized Cost)	12.23%	12.28%	12.13%
Distribution Coverage (NII/Distribution, x)	1.11x	0.85x	1.00x

Segment (Investment Type) Mix

Investment Type (% of FV)	Q4 2024	Q1 2025
Senior Secured First Lien Debt	86.0%	86.9%
Senior Secured Second Lien Debt	0.1%	0.1%
Unsecured Debt	0.6%	0.7%
Equity	13.2%	12.1%

KPIs and Activity

KPI	Q3 2024	Q4 2024	Q1 2025
New Investment Commitments ($m)	$97	$106	$64.848
Funded Commitments ($m)	$78	$100	$55
Sales and Repayments ($m)	$154	$48.289	$49.430
Net Funded Investment Activity ($m)	$(61)	$64	$16
Portfolio Companies (#)	103	105	104
Performing Loans – Floating Rate (%)	94.3%	93.8%	92.6%
Share Repurchases (shares, avg price)	166,000 @ $12.09	170,617 @ $11.74	185,862 @ $11.68

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Base Distribution per Share	Q2 2025	$0.36 (Q1 2025 base)	$0.36	Maintained
Revenue/Margins/OpEx/Tax	2025	N/A	N/A	No formal guidance provided

Note: CION announced improved debt facility economics (UBS facility spread reduced by 45 bps to SOFR+2.75%) but did not provide quantitative forward guidance on revenue, margins, or taxes .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Tariffs/Macro Volatility	Monitoring tariff impacts; low portfolio exposure; diversification efforts (e.g., David’s Bridal)	~6% of portfolio FV at highest tariff risk classification; broader exposure nominal/low	Deteriorated risk awareness; quantified exposure
Balance Sheet & Debt Cost	Repositioning to majority unsecured; baby bond CICB issued; lower facility spreads	Weighted average debt cost ~7.5%; new UBS facility at SOFR+2.75%	Improving economics
Non‑Accruals/Credit Quality	Q3: 1.85%; Q4: 1.41%; portfolio >85% first lien	1.20% of FV; ~87% first‑lien; >98% risk‑rated 3 or better	Improving
Equity Marks (David’s Bridal)	Seasonal working capital build and equity volatility; investment in Pearl marketplace	New growth round diluted marks; Pearl strategy (AI/digital media) emphasized	Volatile; strategic pivot ongoing
Anthem Sports & Entertainment	Mark‑to‑market decline tied to business transition	Transition to variable/advertising model; 24‑month ramp expected	Transitional
Litigation Finance/PIK	PIK income ~17%; repayments increasing	PIK income ~18% from litigation portfolios; repayments picking up	Normalizing/improving cash collections

Management Commentary

“CION reported $0.36 in quarterly net investment income… Driven by lower interest expense as we absorbed the impact of our balance sheet repositioning from late last year.” — Co‑CEO Mark Gatto .
“The weighted average yield for our total funded first‑lien debt investments… was the equivalent of SOFR plus 6.3%.” — President & CIO Gregg Bresner .
“We ended the first quarter with… over $60 million in cash and short‑term investments and an additional $100 million available under our credit facilities… weighted average cost of our debt capital was about 7.5%, down 30 bps q/q.” — CFO Keith Franz .
“We believe CION’s dynamic and differentiated investment approach… allows CION to flex into wherever we see the greatest risk‑adjusted returns while still preserving our conservative first lien focus in the middle market.” — Co‑CEO Mark Gatto .

Q&A Highlights

Anthem Sports transition: Club deal with ~5 lenders; transition from subscription to advertising/variable revenue expected to take ~24 months to ramp .
Health care/pharma marks: Unrealized depreciation driven by market comps trading down; no structural/FDA‑related secular issues cited .
Potential realized gains: Management expects some over time but cannot disclose near‑term specifics due to private company confidentiality .

Estimates Context

Metric	Q3 2024 Consensus	Q3 2024 Actual	Q4 2024 Consensus	Q4 2024 Actual	Q1 2025 Consensus	Q1 2025 Actual
NII per Share (Primary EPS)	$0.38*	$0.40	$0.35*	$0.35	$0.343*	$0.36
Total Investment Income ($USD)	$57.0m*	$59.627m	$54.112m*	$57.894m	$54.149m*	$56.074m
Net Income Normalized ($USD)	$20.402m*	$(0.379)m	$18.359m*	$5.458m	$18.228m*	$(42.705)m

*Values retrieved from S&P Global.

Implications:

Consistent beats on NII per share and revenue reflect strong core income and fee activity; estimate models may need to reflect lower transaction fees and slightly lower portfolio yield (12.13%) .
Large GAAP miss in Q1 (normalized net income vs actual) was driven by unrealized marks, not core NII; models should separate NII (driver of dividend coverage) from equity mark volatility .

Key Takeaways for Investors

Dividend coverage intact; base distribution held at $0.36 with 1.00x coverage in Q1, supported by lower debt costs and disciplined expense management .
NAV volatility is concentrated in a few equity positions (David’s Bridal, Anthem); expect continued mark sensitivity as Pearl scales and Anthem’s pivot ramps over ~24 months .
Credit quality remains solid: non‑accruals down to 1.20% of FV; portfolio largely first‑lien and risk‑rated 3 or better .
Balance sheet flexibility improved (UBS facility spread cut 45 bps); expect incremental tailwind to NII vs Q4 as lower funding costs flow through .
Tariff exposure appears limited (highest‑risk bucket ~6% of FV), but management is actively monitoring macro volatility and consumer confidence impacts .
Near‑term trading: NAV decline and GAAP loss are likely headline negatives; sustained dividend coverage, buybacks (185,862 shares at $11.68), and improving funding costs are potential stabilizers/catalysts .
Medium‑term thesis: Conservative first‑lien focus, selective deployment at improving spreads, litigation finance cash collections, and ongoing portfolio optimization support durable NII, with equity mark normalization as upside optionality .

Additional Source Documents (Q1 2025)

Earnings press release (financials and distributions): “CION Investment Corporation Reports First Quarter 2025 Financial Results” .
Form 8‑K (Item 2.02 results; exhibits incl. earnings presentation): “Current Report on Form 8‑K” .
Earnings call transcript (prepared remarks and Q&A): “Q1 2025 Earnings Conference Call” .
UBS facility press release (economic improvement): “Enters Into a New Three‑Year $125 Million Loan Agreement With UBS” .
Scheduling press release (April 2): “Schedules 2025 First Quarter Earnings Release and Conference Call” .

CION Investment Corp (CION)·Q1 2025 Earnings Summary