Goldman Sachs BDC, Inc. (GSBD)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 results missed Street: NII/share was $0.42 vs $0.46* consensus; total investment income (revenue) was $96.9M vs $101.1M* consensus. NAV/share fell 1.6% q/q to $13.20 as realized/unrealized losses persisted and a $0.16 special dividend was declared .
  Values retrieved from S&P Global.*
• Credit quality was stable-to-improving: non-accruals declined to 1.9% of FV (from 2.0% in Q4) with two new non-accruals offset by exits/return to accrual; portfolio companies showed weighted-average EBITDA and topline growth .
• Dividend framework in force: base dividend $0.32 and special dividend $0.16 declared for Q2; supplemental variable distribution of $0.05 declared for Q1; leverage remained below target at 1.16x (target 1.25x) .
• Deployment muted by M&A slowdown, but new deal spreads widened ~25 bps; PIK income mix improved to 11% from 15% in Q4, reducing quality concerns and supporting core earnings power .

What Went Well and What Went Wrong

What Went Well

• Non‑accruals edged lower and fundamentals improved: “investments on nonaccrual status decreased to 1.9% … [and] weighted average interest coverage … increased to 1.9x,” while leverage fell to 5.8x from 6.2x .
• Better pricing on new originations: “within the spreads for the deals that we did this year, it actually widened out by about 25 basis points… we took advantage of the incumbency” — Alex Chi .
• Liquidity/discipline maintained: net debt/equity 1.16x, ~$720M revolver availability, 48% of debt unsecured — preserving flexibility to rotate into new vintage credits .

What Went Wrong

• Missed consensus and sequential decline: NII/share $0.42 vs $0.46* and total investment income $96.9M vs $101.1M*; TII declined q/q on smaller portfolio and new non‑accrual status placements .
  Values retrieved from S&P Global.*
• Portfolio yield ticked down ~40 bps q/q on cost, driven partly by exit of very high‑coupon non‑accrual loans; Street flagged repricing risk, though management sees repricing largely behind them .
• NAV/share slipped 1.6% q/q to $13.20 on realized/unrealized losses despite special distribution; two positions (MPI Engineered Technologies 2nd lien, ATX Networks 1st lien) moved to non‑accrual .

Financial Results

Quarterly trend (oldest → newest)

Q1 2025 actual vs Street estimates (S&P Global)

Values retrieved from S&P Global.*

Portfolio composition (mix by instrument)

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our focus for new investments is in the low- to mid-9% range with weighted average spreads… widening modestly quarter-over-quarter from 479 bps to 510 bps.” — Alex Chi .
• “Adjusted for the impact of the supplemental dividend… first quarter adjusted NAV per share is $13.15… We ended the quarter with a net debt-to-equity ratio of 1.16x.” — Alex Chi .
• “Despite a modest tightening in portfolio yield… our portfolio companies have both top line growth and EBITDA growth… [and] interest coverage… increased to 1.9x.” — Tucker Greene .
• “PIK as a percentage of total investment income decreased to 11%… from 15% in the fourth quarter of 2024.” — Stanley Matuszewski .
• “We remain focused on delivering on our new dividend structure… and realizing exits of legacy portfolio companies while rotating into new vintage credits.” — Alex Chi .

Q&A Highlights

• Portfolio yield decline: Management attributed the ~40 bp decline primarily to exits of high‑coupon non‑accruals and noted repricing activity has largely subsided; new deal spreads widened ~25 bps, aided by incumbency .
• Tariff exposure: Only ~3% of FV flagged as higher exposure based on conservative screening; no current performance deterioration reflected in marks; more clarity expected post quarter-end policy updates .
• Capital deployment and leverage: Liquidity ample (~$720M availability); leverage at 1.16x below 1.25x target, allowing flexibility to rotate into new credits under the revised dividend framework .

Estimates Context

• Q1 2025 NII/share: $0.42 actual vs $0.46* consensus; Total investment income: $96.94M actual vs $101.12M* consensus; # of estimates: 4 (EPS), 3 (revenue)* .
  Values retrieved from S&P Global.*
• Implication: Modest downward revisions to outer‑quarter NII may be warranted if portfolio size/yields remain pressured; however, improving credit quality, spread widening on new deals, and lower PIK mix support stability in the $0.32 base dividend plus supplemental cadence .

Key Takeaways for Investors

• Headline miss driven by smaller portfolio and non‑accrual placements; trajectory remains manageable with improving credit metrics and declining PIK mix .
• Dividend framework execution is on track (base $0.32, special $0.16, Q1 supplemental $0.05) with leverage under target, providing cushion to sustain payouts through rotation into new vintages .
• New deal spreads widened ~25 bps and incumbency advantages persist, which may mitigate yield headwinds from repricings and lower base rates over time .
• Non‑accruals modestly improved to 1.9% of FV; further exits/recoveries would be a positive stock catalyst given historic valuation sensitivity to credit quality in BDCs .
• Limited direct tariff exposure (~3% FV) reduces macro headline risk relative to more globally exposed lenders; monitoring policy finalization remains prudent .
• Near‑term trading setup: absent major credit events, stock may respond to confirmation of continued supplemental distributions and evidence of deployment at widened spreads.
• Medium‑term thesis: disciplined leverage, capital markets access (48% unsecured mix), and stable first‑lien heavy portfolio (≈96%) position GSBD to defend NAV and sustain dividend under a slower M&A backdrop .

---

Sources: Q1 2025 8‑K and press release, and Q1 2025 earnings call transcript; prior quarter press releases and call remarks for trend context . Values retrieved from S&P Global where marked with an asterisk.*