Executive Summary

Q3 2024 total investment income was $36.7 million and net investment income (NII) was $15.9 million ($0.41 per share), up sequentially from Q2 ($34.2 million; $14.6 million NII; $0.37 per share), while year-over-year income fell vs. $43.8 million and $22.0 million NII ($0.54 per share) in Q3 2023 .
NAV per share increased sequentially to $13.39 from $13.14, aided by a $9.2 million net unrealized gain (notably Gynesonics and Snagajob) and repurchases of 644,763 shares; net increase in net assets from operations rose to $0.65 per share, a sharp improvement vs. $0.21 in Q2 and $0.37 in Q3 2023 .
Originations were solid: seven investments totaling $75.3 million funded, while prepayments accelerated ($75.0 million), and the debt portfolio yield was 15.9%, up from 15.1% in Q2 but below 18.3% in Q3 2023 .
Declared a regular Q4 dividend of $0.40 per share and paused supplemental dividends to prioritize NAV preservation and growth; advisory affiliate agreed to be acquired by BC Partners Credit, expanding origination channels and product set—key stock narrative catalysts near term .
Consensus estimates from S&P Global were unavailable due to data access limits today; therefore, beats/misses vs. Street cannot be assessed and should be revisited post-access restoration.

What Went Well and What Went Wrong

What Went Well

“Runway Growth delivered strong financial performance in the third quarter, reporting sequential net investment income growth and solid originations,” with $36.7 million total investment income, $15.9 million NII, and seven investments funded .
Portfolio risk remained stable (weighted average risk rating 2.48 vs. 2.47 in Q2), pipeline benefited from improving rate backdrop, and the team executed new loans including $23 million to Snap! Mobile and $45.3 million (Runway’s portion) to Zinnia alongside JV activity .
Net unrealized gains of $9.2 million (primarily Gynesonics and Snagajob) lifted NAV per share to $13.39 from $13.14; leverage and asset coverage remained steady (1.08x and 1.92x), and available liquidity was $251.6 million .

What Went Wrong

Year-over-year revenue and NII declined vs. Q3 2023 ($43.8 million total investment income; $22.0 million NII; $0.54 per share), reflecting lower portfolio yield vs. last year and venture market headwinds .
Two loans remained on non-accrual (Mingle Healthcare and Snagajob), with fair values at 53% and 87% of cost, respectively, and loan-to-value increased sequentially from 26.7% to 28.6% on a consistent loan grouping .
Supplemental dividend program paused to focus capital allocation on preserving/building NAV, which may temper near-term income distribution for yield-focused holders .

Financial Results

Sequential performance (Q1 → Q2 → Q3 2024)

Metric	Q1 2024	Q2 2024	Q3 2024
Total Investment Income ($USD Millions)	$40.0	$34.2	$36.7
Net Investment Income ($USD Millions)	$18.7	$14.6	$15.9
Net Investment Income per Share ($)	$0.46	$0.37	$0.41
Net Increase in Net Assets from Ops per Share ($)	$0.30	$0.21	$0.65
Dollar-Weighted Annualized Yield on Debt Investments (%)	17.4%	15.1%	15.9%
NAV per Share ($)	$13.36	$13.14	$13.39
Core Leverage Ratio (%)	91%	110%	108%
Available Liquidity ($USD Millions)	$319.9	$249.8	$251.6

Year-over-year comparison (Q3 2023 → Q3 2024)

Metric	Q3 2023	Q3 2024
Total Investment Income ($USD Millions)	$43.8	$36.7
Net Investment Income ($USD Millions)	$22.0	$15.9
NII per Share ($)	$0.54	$0.41
Dollar-Weighted Annualized Yield on Debt Investments (%)	18.3%	15.9%
NAV per Share ($)	$14.08	$13.39

Portfolio composition (Q1 → Q2 → Q3 2024)

Metric	Q1 2024	Q2 2024	Q3 2024
Total Investments at Fair Value ($USD Billions)	$1.016	$1.063	$1.066
Term Loans ($USD Billions)	$0.970	$1.020	$1.000
Senior Secured Loans (%)	98.5%	98.6%	98.6%
Warrants & Other Equity ($USD Millions)	$46.8	$48.2	$62.2

KPIs and activity (Q1 → Q2 → Q3 2024)

KPI	Q1 2024	Q2 2024	Q3 2024
Funded Investments ($USD Millions)	$24.6	$75.4	$75.3
Principal Prepayments ($USD Millions)	$34.4	$25.3	$75.0
Share Repurchases (Shares)	183,702	1,074,842	644,763
Weighted Avg Portfolio Risk Rating	N/A	2.47	2.48
Non-Accrual Loans (Count)	N/A	N/A	2 (Mingle, Snagajob)

Note: “Revenue” for a BDC is total investment income. Segment reporting not applicable.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular Dividend per Share	Q4 2024	$0.40 (Q3 reg)	$0.40	Maintained
Supplemental Dividend per Share	Q4 2024	$0.05 (Q3 suppl)	Paused	Lowered (paused)
Capital Allocation Focus	Near term	Regular + supplemental distributions	Preserve/build NAV; pause supplemental	Shift to NAV preservation
Advisory Agreement	Q4 2024	Existing adviser (RGC)	New advisory agreement post BC Partners transaction; identical terms, requires shareholder approval	Structural change pending approval

No explicit quantitative revenue/margin/tax guidance provided; management qualitative outlook emphasizes accelerating originations, pipeline expansion, and diversification post-BC Partners transaction .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Originations & Pipeline	Q1: JV with Cadma established; prudent selectivity; $25.0 million in new/existing investments; yield 17.4% . Q2: Two new investments; $75.5 million funded loans; strong pipeline .	Seven investments funded; $75.3 million originations including Snap! and Zinnia; expect to meaningfully add new investments as loans mature .	Improving deployment momentum
Credit Quality	Q1: Focus on underwriting rigor; maintain credit quality . Q2: Senior secured composition 98.6% .	Risk rating stable at 2.48 (vs. 2.47 in Q2); two non-accruals detailed; proactive monitoring .	Stable but watchlist items
Rate Environment & Macro	Q1/Q2: Cautious given evolving venture ecosystem; selective deployment .	Fed cuts encouraging to borrowers; expect gradual improvement; election certainty helpful .	Tailwind forming
Capital Allocation	Q1: Regular $0.40 and supplemental $0.07 dividends . Q2: Regular $0.40 and supplemental $0.05; repurchases 1.07 million shares .	Regular $0.40 declared for Q4; supplemental paused; repurchased 644,763 shares .	Shift to NAV preservation
Strategic Platform	Q1/Q2: JV with Cadma expanding origination avenues .	Advisory affiliate to be acquired by BC Partners Credit; expands origination/product suite (structured equity, ABL, equipment leasing) .	Structural expansion

Management Commentary

David Spreng: “Runway Growth delivered strong financial performance in the third quarter, reporting sequential net investment income growth and solid originations… we funded seven investments during the quarter” .
Greg Greifeld: “Our weighted average portfolio risk rating remained stable at 2.48… we were pleased to fund 7 investments… including $23 million to Snap! Mobile and $45.3 million to Zinnia” .
Thomas Raterman: “We generated total investment income of $36.7 million and net investment income of $15.9 million… recorded a net unrealized gain on investments of $9.2 million… nonaccruals: Mingle Healthcare ($2.6 million FV; 53% of cost) and Snagajob ($37.3 million FV; 87% of cost)” .
Strategic outlook: “BC Partners Credit… will… enable us to accelerate originations… introducing structured equity preferred, asset-based lending… equipment leasing… strengthen sponsor relationships through fund finance” .

Q&A Highlights

Adviser merger: BC Partners is acquiring 100% of the adviser; intended as a long-term strategic holding to expand origination capability and financing solutions; adviser bears deal-related costs under ‘40 Act .
Earnings profile and yield: Expanded product suite should not change asset-level return targets; expect similar income stream to historical .
M&A and exits outlook: With potential rate cuts and greater certainty, expect opportunities to upsize loans for portfolio M&A and finance new acquirers; venture equity down rounds elevate demand for debt .
Prepayments context: ~$30 million early Q4 repayments were expected (refinancing and asset sale); management working to redeploy .
Snagajob status: Near-term remains nonaccrual; plan focused on preserving/restoring NAV with expectation of returning to accrual over the long term .

Estimates Context

S&P Global consensus estimates for Q3 2024 (EPS and revenue) were unavailable due to access limits today. As such, we cannot assess beats/misses versus Street for this quarter; we recommend refreshing S&P Global data to update the estimate comparison promptly.

Key Takeaways for Investors

Sequential improvement: NII per share rose to $0.41 and revenue increased to $36.7 million; net increase in net assets from operations surged to $0.65 per share, driven by unrealized gains—supportive for sentiment despite yoy declines in income and yield .
Deployment momentum: Seven investments funded and a stronger pipeline set up Q4/Q1; prepayments free capacity and may boost portfolio diversification and risk dispersion as larger exposures refinance out .
Credit steady, with watchlist: Risk rating stable; two nonaccruals managed with NAV protection plans; monitoring loan-to-value uptick and ongoing venture liquidity constraints .
Capital allocation pivot: Regular $0.40 dividend maintained but supplemental paused; emphasis on NAV preservation suggests medium-term focus on book value growth over distribution maximization .
Strategic tailwind: BC Partners transaction broadens origination channels and products, potentially accelerating originations and enhancing risk-adjusted returns through diversification—an important medium-term thesis enhancer .
Rate backdrop improving: Management views Fed cuts and post-election clarity as supportive to borrower demand and M&A financing, potentially increasing deal flow and upsizes .
Actionable: Near term, narrative catalysts include advisory acquisition approval, redeployment of prepayments, and continued originations; monitor updates on nonaccrual resolution and any incremental realized gains/losses impacting NAV trajectory .

Runway Growth Finance Corp. (RWAY)·Q3 2024 Earnings Summary