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Blue Owl Capital Corp (OBDC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid results post-merger with OBDE: GAAP NII per share $0.41 and adjusted NII per share $0.39; NAV per share fell modestly to $15.14, driven by credit spreads and isolated write-downs, partially offset by over-earning the base dividend .
  • Results modestly missed Wall Street consensus: EPS $0.41 vs $0.43* and investment income $464.6M vs $469.6M*, reflecting normalization of one-time items, lower base rates, and ~10 bps spread compression; Board declared a $0.01 supplemental dividend and maintained the $0.37 base dividend for Q2 2025 .
  • Portfolio metrics remained resilient: non-accruals rose but stayed low at 0.8% of fair value, first-lien mix increased to 77.5%, weighted average portfolio yield at fair value was 10.7% .
  • Management emphasized defensive positioning and proactive liability optimization (CLO resets, SPV amendments, repayment of OBDE notes), targeting net leverage back within the 0.9x–1.25x range in Q2 after finishing Q1 at 1.26x .

Values with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Durable earnings and dividend coverage: adjusted NII $0.39 with 106% base dividend coverage; Board declared $0.01 supplemental dividend for Q1 and $0.37 base dividend for Q2, underscoring stability despite normalization of one-time income .
  • Scale and defense post-merger: over $18B in total assets; 77.5% first-lien, 82.5% senior secured debt; management highlighted portfolio resilience and defensive orientation to navigate tariff/macro uncertainty .
  • Liability optimization: reset two CLOs and amended bilateral SPVs to reduce interest expense and extend maturities; repaid OBDE’s $142M July 2025 notes; prefunded March 2025 maturity via 2029 notes reopening .

What Went Wrong

  • Earnings vs consensus: GAAP EPS $0.41 vs $0.43* and investment income $464.6M vs $469.6M*; supplemental dividend reduced to $0.01 from $0.05 prior quarter as onetime income normalized (repayment/dividend tailwinds rolled off) *[GetEstimates] .
  • NAV per share dipped to $15.14 from $15.26, driven by changes in credit spreads and write-downs on a small number of names (partly offset by over-earning) .
  • Non-accruals rose to 0.8% of fair value (from 0.4%), reflecting two new additions (e.g., National Dentex) offset by exits, although still low versus sector averages .

Financial Results

Per-Share Metrics vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
GAAP NII per share ($)$0.47 $0.47 $0.41
Adjusted NII per share ($)n/a$0.47 $0.39
Net realized & unrealized gains (losses) per share ($)n/a($0.08) $0.08
Net increase in net assets per share ($)n/a$0.40 $0.49
NAV per share ($)$15.28 $15.26 $15.14

Investment Income (“Revenue”) and NII ($)

MetricQ3 2024Q4 2024Q1 2025
Investment income ($USD Millions)n/a$394.4 $464.6
Net investment income ($USD Millions)n/a$184.2 $201.3

Portfolio Composition (Fair Value) and Mix

CategoryDec 31, 2024 ($000)MixMar 31, 2025 ($000)Mix
First-lien senior secured debt$9,974,880 75.6% $13,703,893 77.5%
Second-lien senior secured debt$706,800 5.4% $891,935 5.0%
Unsecured debt$301,956 2.3% $377,711 2.1%
Preferred equity$371,744 2.8% $550,927 3.1%
Common equity$1,543,689 11.7% $1,797,988 10.2%
Joint ventures$295,476 2.2% $369,552 2.1%
Total investments at fair value$13,194,545 —$17,692,006 —

Key KPIs

KPIQ3 2024Q4 2024Q1 2025
Weighted avg yield at fair value (%)12.1 11.1 10.7
% debt investments at floating rates97.3% 96.4% 96.5%
% senior secured debt investments—81.0% 82.5%
Non-accruals (fair value %)0.7% 0.4% 0.8%
Net debt-to-equity (x)—1.19x 1.26x
Interest coverage (portfolio, x)~1.7x ~1.8x ~1.8x
Investments at fair value ($USD Millions)$13,400 $13,194.5 $17,692.0
New investment commitments ($USD Millions)~$1,200 $1,700 $1,158.9

Q1 2025 Results vs S&P Global Consensus

MetricConsensusActualSurprise
EPS ($)$0.43*$0.41 -$0.02*
Investment income ($USD Millions)$469.6*$464.6 -$5.0*

Values with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Base dividend per share ($)Q2 2025$0.37 (ongoing program) $0.37 declared for Q2 2025 Maintained
Supplemental dividend per share ($)Q1 2025$0.05 Q4 2024 supplemental $0.01 declared for Q1 2025 Lowered
Dividend coverageQ1 2025127% base coverage in Q3/Q4 2024 106% base coverage; confidence in maintaining dividend through 2025 Lowered coverage, maintained outlook
Net leverage targetQ2 20250.9x–1.25x (operating target) 1.26x at Q1, expected back within target in Q2 Temporarily above, expected normalization
Spillover incomeOngoing~$0.39 per share (pro forma with OBDE) ~$0.34 per share Lower, still supportive
Liquidity/capacityOngoingRevolver upsized to ~$3.0B; total liquidity ~$3.2B (Q4) >$3B total cash and facility capacity; undrawn capacity $2.5B Maintained strong liquidity

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4)Current Period (Q1 2025)Trend
Spreads & pricingSpreads troughed ~475–500 bps; stable vs public loan tightening Spreads stable; ~10 bps compression; hope for widening with more M&A/public volatility Stable-to-slightly tighter
M&A pipelineMuted; incumbencies drove originations Originations lighter; majority first lien; incumbencies >50% of pipeline Muted, incumbency-driven
Tariffs/macroPrepared for lower rates; resilient sectors Re-underwrote portfolio; defensive positioning amid tariff uncertainty Heightened caution, proactive review
PIK incomeStable; designed at underwriting; conversions to cash pay Declined to 10.7% of total investment income; more conversions expected Improving quality (cash pay)
Non-accruals0.7% FV Q3; low vs sector 0.8% FV; two additions, three exits; still low Slight uptick, still low
Liability optimizationRevolver upsized; tightest unsecured bond printed; JV restructured CLOs/SPVs repriced; OBDE notes repaid; expect funding cost benefits Ongoing reduction of cost
Strategic equity/JVsSenior Loan Fund wound down; new multi-BDC JV Continue accretive strategic equity/JV deployment; potential to increase allocations Scale via platform adjacencies

Management Commentary

  • “We delivered solid first quarter results… a 10.2% annualized return on equity… defensive orientation and enhanced scale from the recently closed merger with OBDE.” — Craig W. Packer, CEO .
  • “We re-underwrote our investments through potential scenarios… we are confident that OBDC is well positioned to navigate these uncertain times… portfolio built for resilience.” — Craig W. Packer .
  • “Adjusted NII was $0.39 per share… decline primarily reflects a meaningful reduction in one-time income… and remaining impact of interest rate cuts… ~10 bps spread compression.” — Jonathan Lamm, CFO .
  • “We reset two CLOs and amended two bilateral SPVs… repaid OBDE’s notes… prefunded March maturity via reopening our 2029 unsecured notes.” — Jonathan Lamm .

Q&A Highlights

  • Spreads and M&A: Management sees spreads stable despite volatility; hopes for widening with increased activity; M&A remains muted due to tariff uncertainty .
  • Share repurchases/ATM: Active consideration of buybacks within windows; ATM program to be used accretively above book and “never” dilutively .
  • Liability synergies: Repricing opportunities from OBDE liabilities; ongoing actions to lower funding costs .
  • Recession underwriting posture: Portfolio inherently defensive; recession cases always embedded; increased caution in leverage for new deals given macro risks .
  • Strategic equity/JV mix: Plan to “true up” combined portfolio toward OBDC’s prior mix; potential to grow strategic equity/JV exposure to ~15% over time .

Estimates Context

  • Q1 2025 missed consensus modestly: EPS $0.41 vs $0.43*, investment income $464.6M vs $469.6M*; 8 EPS estimates and 5 revenue estimates underpin the quarter’s consensus *[GetEstimates].
  • Target price consensus stood at $14.88* across 12 estimates; the quarter’s normalization in one-time items and rate/spread moves likely leads to modest downward adjustments to near-term EPS and revenue trajectories while dividend coverage remains solid *[GetEstimates].

Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • Post-merger scale and defensive portfolio underpin stable earnings; expect dividend maintenance through 2025 despite lower rates and spread compression, supported by 106% base coverage and ~$0.34 spillover .
  • Near-term earnings headwinds reflect normalization of one-time income (repayment/dividend) and rate/spread moves; supplemental dividend reduced to $0.01, but base held at $0.37 .
  • Liability optimization is an active catalyst (CLO/SPV repricing, note repayments) to support ROE in a lower-rate world; management still targeting leverage back inside 0.9x–1.25x in Q2 .
  • Credit quality remains strong: low non-accruals (0.8%), increasing first-lien mix, declining PIK share to 10.7%; proactive re-underwriting amid macro uncertainty .
  • Originations are lighter given muted M&A, but incumbency advantage and platform scale sustain deployment; watch for spread dynamics if public markets remain volatile .
  • Actionable: In the short term, expect steady dividends and modest estimate recalibration; medium term, liability synergies and platform adjacencies (strategic equity/JVs) should help offset macro headwinds and support ROE stability .
Document sources: 
- Q1 2025 8-K 2.02 and Exhibit 99.1 press release **[1655888_0001193125-25-114945_d945226d8k.htm:0]** **[1655888_0001193125-25-114945_d945226d8k.htm:1]** **[1655888_0001193125-25-114945_d945226d8k.htm:2]** **[1655888_0001193125-25-114945_d945226dex991.htm:0]** **[1655888_0001193125-25-114945_d945226dex991.htm:1]** **[1655888_0001193125-25-114945_d945226dex991.htm:2]** **[1655888_0001193125-25-114945_d945226dex991.htm:3]** **[1655888_0001193125-25-114945_d945226dex991.htm:4]** **[1655888_0001193125-25-114945_d945226dex991.htm:5]** **[1655888_0001193125-25-114945_d945226dex991.htm:6]** **[1655888_0001193125-25-114945_d945226dex991.htm:7]** **[1655888_0001193125-25-114945_d945226dex991.htm:8]** **[1655888_0001193125-25-114945_d945226dex991.htm:9]** **[1655888_0001193125-25-114945_d945226dex991.htm:10]** and **[1655888_20250507NY82628:0]**–**[1655888_20250507NY82628:13]** 
- Q1 2025 earnings call transcript **[1655888_OBDC_3426529_0]**–**[1655888_OBDC_3426529_18]** 
- Prior quarters: Q4 2024 earnings call **[1655888_1986764_0]**–**[1655888_1986764_17]**; Q3 2024 earnings call **[1655888_OBDC_3406592_0]**–**[1655888_OBDC_3406592_17]** 
- Scheduling PR **[1655888_20250403NY57232:0]** 
- Estimates: S&P Global (GetEstimates)