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CI

CION Investment Corp (CION)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was strong: total investment income rose to $78.7M (+32% y/y; +51% q/q) with net investment income (NII) per share of $0.74 and GAAP EPS of $0.69; NAV/share increased 2.5% q/q to $14.86 .
  • Results materially beat Wall Street: Revenue beat consensus by $26.3M (+50%), and EPS beat by $0.41; Q2 had a slight revenue miss and Q3 2024 a modest beat, indicating estimate volatility tied to transaction fees [GetEstimates]* .
  • Distribution cadence changed to monthly starting January 2026; Q4 2025 base distribution of $0.36 was declared; coverage improved to 2.06x in Q3 2025, reinforcing payout sustainability .
  • Capital position improved: net debt-to-equity fell to 1.28x (from 1.39x), with $106M cash/short-term investments and $100M availability; portfolio repositioning (net funded decrease of $69M) reduced leverage while fee events boosted NII .
  • Stock reaction catalyst: out-earning the dividend, NAV accretion, and the shift to monthly distributions could support rerating and yield-focused investor interest despite a modest uptick in non-accruals .

What Went Well and What Went Wrong

  • What Went Well

    • Strong earnings power: NII/share at $0.74 and EPS at $0.69 on robust origination/amendment fees and restructurings; management emphasized “continued NAV appreciation and significant quarterly earnings” driven by activity in 20 portfolio companies with “several fee events” .
    • NAV accretion: NAV/share rose from $14.50 to $14.86 (+2.5%), primarily because CION out-earned its distribution by $0.38/share in Q3 2025 .
    • Distribution policy upgrade: conversion to monthly payments in 2026 and Q4 2025 base distribution of $0.36 declared; distribution coverage improved to 2.06x .

  • What Went Wrong

    • Non-accruals ticked up: non-accruals rose to 1.75% (FV) and 4.06% (amortized cost) from 1.37% and 3.03% in Q2 2025; monitoring needed .
    • Yield compression: yield on performing loans fell to 11.42% from 12.84% in Q2; yield on total investments declined to 9.31% from 10.99% .
    • Elevated expenses alongside higher income: total operating expenses and tax were $40.1M vs $35.3M in Q2 2025, mainly due to higher advisory fees tied to higher total investment income .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total investment income ($USD Millions)$59.627 $52.244 $78.711
Net investment income after taxes ($USD Millions)$21.618 $16.922 $38.567
Net investment income per share ($)$0.40 $0.32 $0.74
Earnings per share (GAAP) ($)$(0.01) $0.52 $0.69
Net increase in net assets from operations ($USD Millions)$(0.379) $27.316 $35.878
Net asset value per share ($)$15.73 $14.50 $14.86
Margin MetricQ3 2024Q2 2025Q3 2025
NII margin (%) = NII/Total investment income36.3% (21.618/59.627) 32.4% (16.922/52.244) 49.0% (38.567/78.711)
OpEx+Tax as % of total investment income63.8% (38.009/59.627) 67.6% (35.322/52.244) 51.0% (40.144/78.711)
Investments at fair value by type ($USD Thousands)Q3 2024Q2 2025Q3 2025
Senior secured first lien debt$1,494,524 (85.3%) $1,501,896 (85.0%) $1,389,814 (80.0%)
Senior secured second lien debt$3,873 (0.2%) $1,011 (0.1%) —
Collateralized securities & structured products – equity$685 (—) $3,027 (0.2%) $4,009 (0.2%)
Unsecured debt$11,761 (0.7%) $8,091 (0.4%) $7,398 (0.4%)
Equity$241,883 (13.8%) $251,930 (14.3%) $336,963 (19.4%)
Total$1,752,726 $1,765,955 $1,738,184
KPIsQ3 2024Q2 2025Q3 2025
Number of portfolio companies103 99 91
% performing loans floating94.3% 90.8% 89.3%
% performing loans fixed5.7% 9.2% 10.7%
Yield on performing loans (amortized cost)12.73% 12.84% 11.42%
Yield on debt & other income investments12.23% 12.35% 10.85%
Yield on total investments10.88% 10.99% 9.31%
Non-accrual (% of portfolio FV / amortized cost)1.85% / 3.40% 1.37% / 3.03% 1.75% / 4.06%
Weighted avg leverage (net debt/EBITDA)5.02x 5.19x (updated) 5.15x
Weighted avg interest coverage2.14x 1.93x 1.94x
Net debt-to-equity1.18x 1.39x 1.28x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Base distribution timingStarting Jan 2026QuarterlyMonthly (declared quarterly in advance) Raised frequency
Base distribution per shareQ4 2025N/A$0.36 payable Dec 15, 2025; record Dec 1, 2025 Maintained payout level
Share repurchase policy2025N/AIncreased authorization by $20M to $80M (Aug 5, 2025) Raised
Distribution coverageQ3 20250.85x–1.11x recent2.06x coverage Improved materially

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Origination/fee activityQ1: “dynamic and differentiated approach… remain highly selective” . Q2: “repayments accelerated… expect additional repayments in Q3 enabling pipeline deployment” .“Robust transaction activity involving 20 portfolio companies, with several fee events, new investments, and repayments” .Fee/event-driven income up; higher NII.
Distributions policyQ1/Q2: $0.36 quarterly base distributions declared .Shift to monthly distributions beginning Jan 2026; Q4 2025 base distribution $0.36 .More investor-friendly cadence; coverage stronger.
Capital structure/leverageQ3 2024: JPM spread cut, bond issuance; net debt/equity 1.18x . Q2 2025: net debt/equity 1.39x; repurchase authorization +$20M .Net debt/equity down to 1.28x; debt outstanding $1.09B .Deleveraging; improved flexibility.
Credit quality/non-accrualsQ3 2024: 1.85%/3.40% . Q2 2025: 1.37%/3.03% .1.75%/4.06% .Mixed; slight uptick in Q3.
Yield environmentQ1/Q2 high yields; performing loan yield 12.62–12.84% .Performing loan yield declined to 11.42% .Yield compression from restructurings/portfolio mix.

Management Commentary

  • “Overall, we reported a strong third quarter with continued NAV appreciation and significant quarterly earnings, driven by robust transaction activity involving 20 of our portfolio companies, with several fee events, new investments, and repayments.” — Michael A. Reisner, Co-CEO .
  • “We will be converting to paying base distributions from quarterly to monthly next year, which we believe will better align our recurring base distributions with our shareholder base.” — Michael A. Reisner .
  • “We are pleased with our growth in NAV and continued steady credit performance… expect additional repayments in the third quarter, which should allow us to deploy into our forward pipeline while balancing our overall leverage profile.” — Michael Reisner (Q2) .
  • “We continue to see opportunities on the direct lending side… remain highly selective given our investment capacity and broader market trends.” — Mark Gatto (Q1) .

Q&A Highlights

  • Q3 2025 earnings call transcript was not available in our document set; the company provided an earnings presentation and webcast details, but the full transcript could not be retrieved here .
  • No further Q&A detail can be cited without the transcript; consider reviewing the archived webcast and investor presentation for clarifications on fee event durability, non-accrual trajectories, and distribution mechanics .

Estimates Context

  • Q3 2025: Revenue consensus $52.41M*, actual $78.71M; EPS consensus $0.33*, actual $0.74 — bold beat on both revenue and EPS driven by fee events and restructurings. Q2 2025: Revenue consensus $53.34M*, actual $52.24M; EPS consensus $0.33*, actual $0.32 — slight miss. Q3 2024: Revenue consensus $57.01M*, actual $59.63M; EPS consensus $0.38*, actual $0.40 — modest beat [GetEstimates]* .
  • Target price consensus remained $10.67* (3 estimates), indicating limited sell-side coverage and potential for estimate volatility as transaction fee timing varies [GetEstimates]*.
S&P Global Wall Street ConsensusQ3 2024Q2 2025Q3 2025
Revenue Consensus Mean ($USD Millions)57.01*53.34*52.41*
Primary EPS Consensus Mean ($)0.38*0.33*0.33*
Primary EPS – # of Estimates2*3*3*
Revenue – # of Estimates2*3*3*
Target Price Consensus Mean ($)10.67*10.67*10.67*
Target Price – # of Estimates3*3*3*
Actuals (from company)Q3 2024Q2 2025Q3 2025
Total investment income ($USD Millions)$59.627 $52.244 $78.711
Net investment income per share ($)$0.40 $0.32 $0.74

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Earnings power inflected: fee-heavy quarter drove NII margin to ~49%, comfortably covering the $0.36 dividend; recurring base distribution cadence shifting to monthly in 2026 is a positive for income investors .
  • NAV accretion q/q (+2.5%) and deleveraging (net debt/equity down to 1.28x) suggest improved balance-sheet resilience; buybacks continued ($3.3M in Q3, $50.3M total to date) .
  • Watch credit: non-accruals rose to 1.75%/4.06%; yield compression on performing loans (11.42%) indicates potential headwinds if fee events normalize .
  • Estimates implications: Sell-side may lift near-term revenue/NII assumptions to reflect fee activity but should temper for sustainability; limited coverage (3 estimates) and volatile fee timing can drive beats/misses [GetEstimates]*.
  • Trading setup: Positive catalysts include monthly distribution announcement, strong coverage, and NAV accretion; risk is credit normalization/non-accrual drift. Consider positioning for income with attention to credit metrics and fee event cadence .
  • Medium-term thesis: Conservative first-lien focus with active capital management, improving leverage profile, and disciplined deployments can support NAV stability and dividend sustainability through cycles .
  • Actionable: Monitor Q4 distribution coverage, non-accrual progression, and origination pipeline; track debt schedule and available capacity ($100M) as levers for opportunistic deployment without overleveraging .