Executive Summary

Q4 2024 showed stable core earnings and a modest NAV increase: Net investment income (NII) was $14.2M ($0.35 per share) and NAV rose 1.0% q/q to $15.53; total investment income was $33.5M .
Portfolio credit quality remained solid with non‑accruals at 1.5% of fair value (5.6% at cost) and favorable LMM equity performance (fair value 179% of cost) .
Operational highlights: $29.5M in private loan fundings (net decrease in cost basis $5.5M), $30.5M LMM investments (net increase $16.4M), and a $7.5M net decrease in middle market cost basis; Board-approved listing steps advanced (reverse split completed; shares expected to trade as “MSIF”) .
Wall Street consensus from S&P Global was unavailable; comparisons to estimates are not provided.

What Went Well and What Went Wrong

What Went Well

NAV trajectory improved: NAV per share increased to $15.53 (+$0.15 q/q, +1.0%) on net tax benefit and net unrealized appreciation, partially offset by realized losses .
Credit quality and equity marks: Non‑accruals remained low at 1.5% of fair value (5.6% at cost); LMM equity fair value at 179% of cost underscores strong marks and embedded value .
Strategic progress toward listing: Stockholders approved listing-related proposals; completed a 2‑for‑1 reverse split and aligned dividend per share; “anticipates” NYSE trading as MSIF later in 2025, a potential liquidity and awareness catalyst .

Management quote (earnings call): “We would expect the leverage to tick up closer to full capacity knowing that in early 2026 we’re effectively going to double our regulatory leverage capacity.”

What Went Wrong

Top-line softness vs prior year: Total investment income declined 4% y/y ($33.5M vs $34.8M), driving a 5% y/y decrease in NII ($14.2M vs $15.0M) and $0.02 lower NII per share ($0.35 vs $0.37) .
Realized losses remained a headwind: Q4 NAV uplift was “primarily due” to tax benefit and net unrealized appreciation, but partially offset by net realized losses on portfolio investments .
Deployment drag in private loans: Despite $29.5M funded, repayments and a realized loss produced a net $5.5M decrease in private loan cost basis in the quarter .

Financial Results

Quarterly comparison (Q2 2024 → Q4 2024)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Investment Income ($USD Millions)	$33.946	$33.477	$33.455
Net Investment Income ($USD Millions)	$14.365	$14.182	$14.227
NII per Share ($USD)	$0.18	$0.18	$0.35
NAV per Share ($USD)	$7.78	$7.69	$15.53 (post 2-for-1 reverse split)

Note: Q4 2024 per-share values reflect the 2‑for‑1 reverse stock split; Q2/Q3 2024 per-share values are pre-split. The Q4 press release indicates prior periods shown therein were adjusted; the 10‑Qs cited above present original pre‑split values .

Year-over-year (Q4 2024 vs Q4 2023)

Metric	Q4 2023	Q4 2024	Δ YoY
Total Investment Income ($USD Millions)	$34.761	$33.455	(4%)
Net Investment Income ($USD Millions)	$15.042	$14.227	(5%)
NII per Share ($USD)	$0.37	$0.35	(0.02)
Net Increase in Net Assets from Operations ($USD Millions)	$20.462	$20.5	~Flat

Portfolio activity by strategy (Q4 2024)

Strategy	Gross Investments ($USD Millions)	Net Change in Cost Basis ($USD Millions)
Private Loan	$29.5	(5.5)
Lower Middle Market (LMM)	$30.5	+16.4
Middle Market	n/a	(7.5)

KPIs

KPI	Q4 2024
Non‑accruals (% of portfolio)	1.5% fair value; 5.6% cost
Return on Equity (annualized, quarter)	13.2%
LMM Equity FV/Cost	179%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular + supplemental dividend per share	Q1 2025	$0.18 pre-split	$0.36 post 2‑for‑1 reverse split	Raised nominal per-share via split alignment
Listing timeline	2025	N/A	Anticipates NYSE listing as “MSIF” later in 2025 (no assurance)	New listing plan disclosed
Share repurchase authorization	12 months starting Mar 2025	N/A	Up to $65.0M when stock trades below most recent NAV per share (pre‑determined levels)	New plan (in conjunction with offering)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2–Q3 2024)	Current Period (Q4 2024)	Trend
Balance sheet leverage	Leverage modest; debt facilities active	Management expects leverage to move closer to full capacity; expanded regulatory leverage in early 2026	Increasing capacity and intent to utilize
Listing readiness	Reverse split executed Dec 16, 2024	Anticipates trading as MSIF later 2025; approvals completed	Advancing toward listing
Credit quality	Non‑accrual flags noted in filings (position-level footnotes)	Non‑accruals low at 1.5% FV / 5.6% cost	Stable/constructive
Portfolio deployment	Active fundings with offsetting repayments	Private loan net cost basis down; LMM net cost basis up; middle market down	Mix shift toward LMM
Dividends	Regular distributions consistent through 2024	Q1 2025 dividends aligned to split ($0.36)	Maintained payout power

Management Commentary

Prepared remarks emphasized capital deployment and leverage trajectory: “We would expect the leverage to tick up closer to full capacity knowing that in early 2026 we’re effectively going to double our regulatory leverage capacity.” (CEO)
Near-term pipeline confidence: “We feel good about the pipeline… don’t have concerns there,” while noting potential dilution if equity cannot be quickly deployed (Q&A) .
Investor relations framing: Call and release timing provided; replay available per IR details .

Q&A Highlights

Leverage capacity and timeline: Management reiterated expectation to increase leverage toward capacity in 2025, with regulatory leverage expansion effective early 2026, subject to lender execution .
Deployment vs dilution: Acknowledged temporary dilution risk from equity raise if not rapidly deployed; expressed confidence in pipeline and deployment pace .
Dividend outlook and ROE: Maintained payout alignment post‑split and discussed ROE trajectory improvement as portfolio scales (call context) .

Estimates Context

Wall Street consensus (S&P Global) was unavailable for MSCF/MSIF for Q4 2024. As a result, estimate comparisons (EPS and revenue) are not provided and no S&P Global-derived values are included.

Key Takeaways for Investors

Steady core earnings with resilient credit quality: NII of $14.2M and low non‑accruals (1.5% FV) indicate stable core earning power and disciplined underwriting .
NAV momentum supports valuation: Q4 NAV per share increased to $15.53, aided by net unrealized appreciation and tax benefits; watch realized loss cadence into 2025 .
Deployment mix shifting: LMM net cost basis growth (+$16.4M) vs private loan net decrease reflects evolving opportunity set; monitor fee/Dividend income mix and repayments .
Listing is a near-term catalyst: With governance approvals and reverse split complete, anticipated NYSE listing (MSIF) could broaden investor base and improve liquidity (timing not assured) .
Dividend consistency: Post‑split regular dividend alignment ($0.36 for Q1 2025) underscores distributable NII stability; evaluate payout coverage as leverage increases .
Balance sheet strategy: Management intends higher utilization of leverage with expanded capacity in 2026; this can enhance NII but requires vigilant credit risk management .
Actionable: Position for potential rerating on listing, monitor quarterly deployment pace and non‑accruals, and track realized vs unrealized components impacting NAV.

Source Documents Read

8‑K (Item 2.02) with Q4 2024 preliminary results and listing update; full press release included .
8‑K (Item 2.02) private loan portfolio activity press release for Q4 2024 .
Company press release: “MSC Income Fund Announces 2024 Fourth Quarter and Annual Results” (March 19, 2025) .
Q3 2024 10‑Q (for trend analysis of Q3 2024) .
Q2 2024 10‑Q (for trend analysis of Q2 2024) .
Q4 2024 earnings call transcript (Seeking Alpha) .

MSC INCOME FUND, INC. (MSCF)·Q4 2024 Earnings Summary