Sign in

You're signed outSign in or to get full access.

SuRo Capital - Earnings Call - Q1 2025

May 6, 2025

Executive Summary

  • Q1 2025 NAV per share was $6.66 (net assets $156.8M), essentially flat vs Q4 2024 ($6.68) and down vs Q1 2024 ($7.17). Net investment loss was $(3.7)M or $(0.16)/sh; net change in unrealized appreciation was +$2.9M, yielding a small net decrease in net assets from operations of $(0.8)M. Note: the detailed statement shows $(0.03)/sh, while the summary table shows $(0.04)/sh (rounding).
  • Liquidity ended at ~$18.1M (cash ~$16.2M; ~$1.9M unrestricted public securities) with an additional ~$20.4M of public securities subject to lockups (ServiceTitan and CoreWeave).
  • Estimates context: Q1 Primary EPS (NII per share) missed by ~$0.02 (actual $(0.16) vs $(0.14)), and “Revenue” (total investment income) missed by ~$0.73M (actual $0.50M vs $1.23M) on one estimate each; the shortfall reflects much lower investment income vs prior year ($0.50M vs $1.53M) as U.S. T-bill income rolled off and portfolio income was modest. Values retrieved from S&P Global.
  • Portfolio catalysts: CoreWeave completed the largest tech IPO since 2021; OpenAI closed a $40B raise at a $300B valuation. ServiceTitan shares are expected to be tradable by June 2025 and CoreWeave by September 2025; management reiterated it typically exits public holdings post-lockup and then evaluates distributions of realized gains.

What Went Well and What Went Wrong

  • What Went Well

    • Unrealized gains: Net change in unrealized appreciation of +$2.9M ($0.12/sh) offset a large portion of the net investment loss, helping keep NAV/share stable Q/Q.
    • Portfolio momentum: Management highlighted CoreWeave’s IPO and OpenAI’s $40B financing ($300B post) as key value drivers; “We believe our portfolio is well positioned for when the IPO window reopens”.
    • Clear monetization roadmap: “We don’t view ourselves as holders of public securities… when the lockup expires… we would exit the position” (re: ServiceTitan). Expected tradability: ServiceTitan by June 2025; CoreWeave by Sept 2025.

  • What Went Wrong

    • Investment income down sharply vs prior year ($0.50M vs $1.53M) as T-bill interest and controlled investment interest declined; operating expenses remained elevated, resulting in $(3.66)M NII.
    • Consensus misses: NII/share came in below the single estimate and total investment income also missed a single estimate (limited coverage) as portfolio income was light in the quarter (see Estimates Context) (Values retrieved from S&P Global).
    • Ongoing expense ratios: Annualized ratio of operating expenses/avg net assets rose Y/Y (10.79% in Q1 2025 vs 9.44% in Q1 2024) and the ratio of net investment loss/avg net assets remained negative (−9.49%).
View the full earnings report

Transcript

Operator (participant)

Hello, and welcome to SuRo Capital's first quarter 2025 earnings call. My name is Melissa, and I will be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star followed by one on your keypad to register your question. If you require assistance at any point, please press star zero to be connected to an operator. I'd now like to turn the call over to Evan Schlossman, Principal. Please go ahead.

Evan Schlossman (Principal)

Thank you for joining us on today's call. I am joined by the Chairman and Chief Executive Officer of SuRo Capital, Mark Klein, and Chief Financial Officer, Allison Green. Please note that a slide presentation corresponding to today's prepared remarks by management is available on our website at www.surocap.com under investor relations, events, and presentations. Today's call is being recorded and broadcast live on our website www.surocap.com. Replay information is included in our press release issued today. This call is the property of SuRo Capital, and the unauthorized reproduction of this call in any form is strictly prohibited. I would also like to call your attention to customer disclosures in today's earnings press release regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements which relate to future events or our future performance or financial condition.

These statements are not guarantees of our future performance or future financial condition or results and involve a number of risk estimates and uncertainties, including the impact of any market volatility that may be detrimental to our business, our portfolio companies, our industry, and the global economy that could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including but not limited to those described from time to time in the company's filings with the SEC. Management does not undertake to update these forward-looking statements unless required to do so by law. To obtain copies of SuRo Capital's latest SEC filings, please visit our website at www.surocap.com or the SEC's website at sec.gov.

Now, I would like to turn the call over to Mark Klein.

Mark Klein (Chairman and CEO)

Thank you, Evan. Before we dive into our portfolio highlights, I would like to start with a brief overview of the broader market environment. The first quarter of 2025 was a particularly challenging period for the public markets. The Nasdaq posted its worst quarterly performance since 2022, and major indices such as the Russell 2000 and the Dow Jones Industrial Average also saw significant declines. Ongoing uncertainty around global trade tensions and new tariffs weighed heavily on investor sentiment. This environment also had a direct impact on private market valuations. As always, we determined fair value for our investments using a range of inputs, including public market comparables. With the public markets declining, our portfolio company valuations as of March 31st naturally reflected the broader compression. This turbulence intensified in the second quarter.

In April, the S&P 500 experienced one of the most volatile stretches in recent memory, despite ending the month down just slightly under 1%. The index fell as much as 12% at its lowest point before sharply rebounding, including a 9.5 % surge on April 9th, the largest single-day gain since 2008, following a temporary pause in the Liberation Day tariffs. Meanwhile, the VIX spiked to above 55, reaching its highest level since the onset of COVID. Despite these challenges, we are encouraged by the recent earnings calls from major tech companies, which reaffirm their commitment to capital spending, even as macro uncertainties persist. We believe our portfolio is well-positioned for when the IPO window reopens. Our companies continue to execute at a high level, and many are building fundamental momentum that we believe will drive valuation creation over the long term.

With that context in mind, I'd like to begin by highlighting one of our largest investments, OpenAI, which continues to deliver extraordinary growth and market leadership. In March, the company announced a $40 billion funding round at a $300 billion post-money valuation, the largest private capital raise ever by a technology company. This marks a significant step up from its previous $7 billion round and a $150 billion post-money round announced in October of last year. This achievement reflects the incredible success OpenAI has demonstrated over the past few months. At the time of this financing, OpenAI announced it had 500 million weekly active users. According to Reuters, that represents an increase from 300 million weekly active users in December. Additionally, the company shared an astounding statistic. The company's systems are now used by approximately 10% of the global population, or approximately 800 million people.

OpenAI's growth has been driven by a steady cadence of new models, releases, and enhanced functionality. Recent launches, including the O3 and O4 mini models, as well as significant improvements to ChatGPT's user interface, memory, and search capabilities. These advances represent a step change in ChatGPT's capabilities, combining the state-of-the-art reasoning with seamless tool integration. Furthermore, public reports from The Information indicate OpenAI is forecasting revenue to more than triple in 2025 to approximately $13 billion and is projecting revenue to reach $29 billion in 2026, $54 billion in 2027, $86 billion in 2028, $125 billion in 2029, and $174 billion in 2030. These forecasts represent an increase from the company's previous forecasts in the fall of last year. Moving on to CoreWeave. On March 28th, CoreWeave completed the largest technology company IPO since 2021, raising $1.5 billion at a valuation of approximately $23 billion.

CoreWeave's momentum as a leading AI infrastructure provider has continued through its IPO. In March, CoreWeave announced a five-year, $11.9 billion contract with OpenAI to supply access to AI infrastructure. According to the information, CoreWeave has entered into advanced discussions to provide NVIDIA's new Blackwell chips to Google. This potential Google deal underscores CoreWeave's strategic advantages as a nimble AI-first cloud provider with a uniquely close relationship with NVIDIA. Since the IPO at the end of March, recent positive developments have furthered support for CoreWeave's positioning and have helped underscore both the company's critical role in the AI infrastructure ecosystem and the sustained importance of AI infrastructure as a whole. These developments have contributed to an over 35% increase in the stock price based on today's closing price, significantly outperforming broader market indices.

More broadly, recent developments continue to reinforce the critical importance of AI infrastructure and compute capacity, even amid ongoing economic uncertainty. OpenAI's recent $40 billion fundraising further underscores strong investor confidence and sustained demand for AI infrastructure, while hyperscalers remain committed to aggressive investments supporting future AI growth. On recent earnings calls, Alphabet, Microsoft, Amazon, and Meta all highlighted the continued significance of AI compute capacity and robust market demand driving future investments. Notably, Alphabet and Microsoft reaffirmed their forward CapEx guidance, while Meta increased its 2025 capital expenditure forecast to $64 billion-$72 billion. For reference, we marked our CoreWeave investment at $31.52 per share in the first quarter, which is inclusive of a customary discount. Today, the stock closed at over $54 per share.

We believe that CoreWeave remains underappreciated in the public markets and expect the company's critical role in the AI infrastructure ecosystem to be better understood by the markets over time. While CoreWeave is building the foundation for AI at the infrastructure layer, one of our other portfolio companies, Canva, continues to innovate at the application layer. Canva recently unveiled its Visual Suite 2.0, making advanced AI capabilities more accessible in everyday design. According to Business Wire and company announcements, Canva's rapid global growth continues to accelerate, with more than 145 million users joining the platform since the launch of Canva's initial Visual Suite in 2022. Today, more than 375 designs are created every second, with a total of 36 billion designs created since Canva's launch in 2013. Canva has gained traction across 190 countries and brought more than 95% of the Fortune 500.

The growing global adoption across the world's most influential companies has helped propel Canva to more than $3 billion in annualized revenue, marking an increase of more than 30% over last year. Transitioning to our recent investment activity, we are pleased to share that subsequent to quarter's end, we made a $5 million investment in Plaid through a sole limited partnership interest in 1789 Capital Nirvana LP. Our investment was part of Plaid's $575 million financing led by Franklin Templeton, Fidelity, NEA, Ribbit Capital, and others. According to TechCrunch, the round was completed at a $6.1 billion post-money valuation. According to CNBC, this financing is anticipated to be Plaid's last private financing before the company lists on the public markets. According to Pitchbook, the financing brings the total capital raised to date by Plaid to approximately $1.3 billion.

Plaid is a market-leading fintech platform that enables secure and seamless connectivity between financial applications and consumers. In recent years, Plaid has evolved from a business solely focused on bank linking into a broader financial infrastructure provider, offering a suite of data and risk solutions that are essential to modern financial services. Today, Plaid supports more than 100 million users globally, with more than half of the U.S. adults having used Plaid, and it is trusted by over 12,000 financial institutions across 17 countries. Its infrastructure is integrated with more than 8,000 digital finance apps, including many of the top fintech platforms such as Venmo, Robinhood, Klarna, and Coinbase. We are excited about Plaid's latest suite of features, including Signal, which allows businesses to confirm if an account is in good standing before initiating a transfer, and Identity Verification, which enables secure biometric onboarding.

These tools help reduce fraud, failed payments, and friction in financial transactions. We believe these initiatives position Plaid well for continued growth as one of the premier plays in fintech. Before turning to our quarterly results, I'd like to briefly highlight another position, Columbia Acquisition Corp. II. In January, Columbia announced a definitive business combination agreement with Metroplex Trading Company, doing business as GrabAGun, a mobile-focused online firearms retailer. In late March, Metroplex announced the nomination of Donald Trump Jr. to the board of directors of the publicly traded company that will result from its proposed business combination. Thorough Capital has invested in Columbia Sponsor II in the sponsor corporate of Columbia Acquisition II. We believe this transaction, when consummated, will be another testament to the success of our SPAC sponsor strategy established several years ago.

Before highlighting additional updates on our portfolio, I'd like to turn to our first quarter results. We ended the quarter with a net asset value of $156.8 million, or $6.66 per share. This NAV compares to a total net asset value of $6.68 per share at year's end. Please turn to slide 10. SuRo's top five positions as of March 31st were OpenAI through our investment in Arc Type I Deep Ventures, Whoop, CoreWeave, which includes our $15 million investment in CW Opportunity II, and our aggregate $10 million follow-on secondary investments in CoreWeave, Lernio, and ServiceTitan. These positions accounted for approximately 46% of the investment portfolio at fair value. Additionally, as of March 31st, our top 10 positions accounted for approximately 72% of the investment portfolio.

Continuing with our broader portfolio, in January, we executed a $1 million follow-on investment in Whoop via a safe note, bringing our total cost basis to $11 million. We made our initial $10 million investment in Whoop in Q2 of 2022 via a secondary transaction. Since our initial investments, Whoop has solidified itself as a leader in the wearable fitness and performance tracking space. Last year, Whoop expanded into several key international markets, including the Middle East, where it has seen strong consumer adoption and growing brand recognition. Whoop has also continued to distinguish itself as the go-to wearable for elite athletes and high-performance individuals. In a testament to its credibility at the highest level of sports, Rory McIlroy wore a Whoop throughout his winning performance at the Masters, showcasing the device's role in tracking and optimizing real-time athletic performance on one of the largest stages in sports.

Given the significant valuations of its competitors, most notably aura, which raised $200 million at a $5.2 billion valuation in December, we believe there is tremendous upside for Whoop. We are also encouraged by the recent social media posts from Whoop's CEO and one of its major athlete sponsors, Cristiano Ronaldo, both of which indicated there is a major announcement coming later this week. Before I turn the call over to Allison, I would like to reiterate how excited we are about the positioning of our portfolio. Across AI infrastructure and applications and consumer goods and services, our portfolio is well situated with market-leading companies. Within AI infrastructure, CoreWeave, OpenAI, and Vast Data represent approximately 20% of our gross assets. Within AI-adjacent companies, Canva, ServiceTitan, Whoop, Link Health, and Locus Robotics representing 30% of our gross assets.

Within our consumer vertical, Liquid Death and Lime are two dynamic leading brands with businesses approaching scale to potential IPO. Altogether, these investments give our investors access to some of the most highly anticipated pre-IPO names in the private markets. I would also like to provide further context regarding the valuation of our portfolio companies that recently have become public. Allison will provide additional details in her prepared comments. We value our recently public positions in ServiceTitan and CoreWeave using quarter-end trading prices adjusted for a discount rate as these shares were not registered as of March 31st. The results in these position values marked below the public market prices at quarter's end. As previously announced, our position in CoreWeave is marked at $32.52 per share. That mark is meaningfully below CoreWeave's current trading values. The stock closed today at over $54 per share.

Additionally, we marked ServiceTitan at $88.45 per share at quarter's end. This stock closed today at approximately $113 per share. Depending on various conditions, ServiceTitan's lockup is expected to run through early June, and CoreWeave's lockup is anticipated to run through the middle of August to the middle of September. Finally, in terms of dividends, as we have mentioned before and consistent with all BDCs, we are required to distribute functionally all of our net realized gains. Consistent with our past practices, we will be transparent and communicative about our dividend strategy. Thank you for your attention. With that, I would hand it over to Allison Green, our Chief Financial Officer.

Allison Green (CFO)

Thank you, Mark.

I would like to follow Mark's update with a more detailed review of our first quarter and financial results as of March 31st, as well as a brief highlight of investment activity during and subsequent to quarter end and our current liquidity position. I will also include an update on our current 6% notes due 2026, their repurchase, and the 6.5% convertible notes due 2029. As Mark mentioned, during the first quarter, we made two follow-on investments. First, on January 31st, we completed an aggregate $300,000 follow-on investment in Orchard's Series one Senior Preferred Shares and Safe Note, bringing our total investment in Orchard to approximately $12.8 million. Second, on February 6, we completed a $1 million follow-on investment in Whoop through a Safe Note, bringing our aggregate investment in Whoop to approximately $11 million.

Subsequent to quarter end, we completed a $5 million investment in Plaid's Class A Common Shares through 1789 Capital Nirvana II LP, an SPV in which Thorough Capital is the sole limited partner. The $5 million does not include a 7% or $350,000 origination fee paid at the time of investment or other capitalized cost of the transaction. Additionally, we will prepay expenses of the SPV on an annual basis. Regarding our liquidity as of quarter end, we ended the quarter with approximately $18.1 million of liquid assets, including approximately $16.2 million in cash and approximately $1.9 million in unrestricted public securities. Not included in our unrestricted public securities are approximately $20.4 million of public securities subject to lockup or other sales restrictions as of quarter end. These include our investments in ServiceTitan and our direct ownership in CoreWeave.

As of March 31st, SuRo Capital's common shares of ServiceTitan were not registered and were therefore subject to certain restrictions on sale or transfer for which we applied discounts to the closing share price as of the reporting date. We anticipate the shares will be registered and freely tradable by June 2025. As of March 31st, SuRo Capital's Class A common shares of CoreWeave were not registered and were therefore subject to certain restrictions on sale or transfer for which we applied discounts to the closing share price as of the reporting date. We anticipate these shares will be registered and freely tradable by September 2025. Similarly, we take the same approach regarding the valuation of our Class A membership interest in CW Opportunity 2 LP.

CW Opportunity 2 LP is an SPV for which the Class A membership interest is solely invested in the Class A Common Shares of CoreWeave. Thorough Capital is invested in the Class A Common Shares of CoreWeave through its investment in the Class A membership interest of CW Opportunity 2 LP. As of March 31, Thorough Capital has confirmed the underlying Class A Common Shares of CoreWeave held by CW Opportunity 2 LP were not registered and are therefore subject to certain restrictions on sale or transfer for which we apply a discount to the closing share price as of the reporting date to ascertain the valuation of our Class A membership interest at quarter end. Please turn to slide 16.

Segmented by seven general investment themes, the top allocation of our investment portfolio at quarter end was to artificial intelligence infrastructure and applications, representing approximately 28% of the investment portfolio at fair value. Software as a service and consumer goods and services were the next two largest categories with approximately 22% and 17% of our portfolio, respectively. 12% of our portfolio was invested in financial technology and services, and education technology companies accounted for approximately 12% of the fair value of our portfolio. The logistics and supply chain category accounted for approximately 8% of the fair value of our portfolio, and sports accounted for 2% as of March 31st. Please turn to slide 16. I'd like to first provide an update on the note repurchase program for the 6% notes due 2026 and the issuances of our 6.5% convertible notes due 2029.

On August 6th, 2024, SuRo Capital's Board of Directors approved a discretionary note repurchase program, which allows the company to repurchase up to $35 million of our 6% notes due 2026, exclusive of any applicable fees through open market purchases, including block purchases, in such a manner as will comply with the provisions of the Investment Company Act of 1940 as amended and the Securities Exchange Act of 1934 as amended. During the quarter ended March 31st, we repurchased an additional $199,990 of the 6% notes due 2026 under the note repurchase program. As of March 31st, we had repurchased $1,413,294 of the 6% notes due 2026 under the note repurchase program, resulting in the total use of the authorized available funds. As of March 31st, the remaining aggregate principal balance of the 6% notes due 2026 was approximately $40 million.

On August 6th, 2024, SuRo Capital entered into a note purchase agreement to issue up to a maximum of $75 million in aggregate principal amount of 6.5% convertible notes due 2029. The net proceeds from the offering of the convertible notes will be used to repay outstanding indebtedness, make investments in accordance with our investment objective and investment strategy, and for other general corporate purposes. In 2024, under the note purchase agreement, SuRo Capital issued a total of $30 million in aggregate principal initial and additional convertible notes. On January 16th, 2025, SuRo Capital issued $5 million in additional convertible notes. Upon issuance of the additional notes on January 16th and as of March 31st, 2025, the outstanding aggregate principal amount of our convertible notes became $35 million.

Interest on the convertible notes will be paid quarterly in arrears on March 30th, June 30th, September 30th, and December 30th at a rate of 6.5% per year. The convertible notes will mature on August 14th, 2029, and may be redeemed in whole or in part at any time or from time to time at our option on or after August 6th, 2027, upon the fulfillment of certain conditions. The convertible notes will be convertible into shares of our common stock at the purchaser's sole discretion at an initial conversion rate of 129.0323 shares of our common stock for $1,000 principal amount of the convertible notes, subject to adjustments and limitations as provided in the note purchase agreement. The additional notes are treated as a single series with the initial notes and have the same terms as the initial notes.

The additional notes are fungible and rate equally with the initial notes. The note purchase agreement includes customary representations, warranties, and covenants by the company. We ended the first quarter 2025 with an NAV per share of $6.66, which is consistent with our financial reporting. The decrease in NAV per share from $6.68 at the end of 2024 was primarily driven by a $0.16 per share decrease due to net investment loss, offset by a $0.12 per share increase resulting from the net change in unrealized appreciation of investments during the quarter, and a $0.02 per share increase in the impact of stock-based compensation during the quarter. Other items had a net immaterial impact. At March 31st and currently, there are 23,551,859 shares of the company's current stock outstanding. That concludes my comments. We would like to thank you for your interest and support of SuRo Capital.

Now I will turn the call over to the operator to start the Q&A. Operator.

Operator (participant)

Thank you. As a reminder, if you would like to ask a question on today's call, you may press star followed by one on your keypad to register your question. To withdraw your question for any reason, you may press star two. We kindly request that you limit yourself to one question. We'll go ahead and take our first question from Brian McKenna of Citizens. Please go ahead.

Brian McKenna (Director of Equity Research)

Thanks. Good evening, everyone. We're not too far off from the six-month lockup expiration for ServiceTitan. Can you just remind us what your plan is here with this position? I'm assuming you'll sell this down in relatively short order as you typically do, assuming no material change in the stock price from here. In terms of redeploying that capital, I mean, where are you seeing the best opportunities to invest right now? Is it still in and around the AI theme, or are there some other emerging themes that are a little bit more compelling today, similar to the Plaid investment? Any color there would be helpful.

Mark Klein (Chairman and CEO)

Thanks, Brian. First of all, as we've been really consistent about that, we don't view ourselves as holders of public securities. When a lockup expires, pretty much as you described it, in normalized market conditions, we would exit the position. From there, where we would deploy it, I'd say we're seeing a whole host of opportunities, Brian. As you and I have discussed and I have discussed on these calls, we are probably seeing more opportunities now than ever before.

Clearly, AI and AI-adjacent companies are an immense opportunity set that we are looking at. We continue to look in the fintech areas and some of the other and some of the consumer areas. AI, AI-adjacent, which covers a wide swath, is a lot of what we're seeing right now.

Operator (participant)

Thank you. Our next question is from Marvin Fong with BTIG. Please go ahead.

Marvin Fong (Director)

Great. Good evening. Thanks for taking my questions. Just like a little more color on the discount for the shares that were not registered. Just out of my own edification, is this something that is kind of standard, the % discount, or is this something that is subjective and case by case? I just kind of love to understand that process.

The second question, we'd just love if you have any thoughts on the nonprofit situation at OpenAI that the news and, like I say, the last 24 hours, it sounds like the nonprofit will continue to be involved in the management and ownership. Any thoughts you'd have there, we'd love to hear it. Thanks.

Mark Klein (Chairman and CEO)

Thanks, Marvin. And thanks for your support. I'll let Allison answer the discount question. What I would say in respect to the OpenAI, we're all reading the news at the same time. I don't think that the nonprofit being involved is going to impact the value of the company for the public as it goes to become a for-profit organization. I certainly don't think it was read as particularly negative or particularly impactful.

Clearly, as we discussed in our prepared remarks, the OpenAI story is unfolding extremely rapidly and very exciting, the traction they get and the ongoing progress that they're making. In respect to the discount, I'll let Allison respond. Wonderful.

Allison Green (CFO)

Thanks, Marvin. And thank you for your question. Regarding the discounts that have been applied to CoreWeave and ServiceTitan, those are specifically related to the fact that the shares that we own or that are owned on our behalf are not registered at this time. As of March 31st, they were not registered upon IPO. At the point when they become registered by the company and the company's transfer agent, we will remove that discount.

Operator (participant)

Thank you. Our next question is from Alex Paris with Barrington Research. Please go ahead.

Alex Paris (Principal and Senior Managing Director)

Hi, guys. Thanks for taking my question.

I guess I'll ask my question about rules and process regarding return of capital to shareholders under your corporate structure. Obviously, ServiceTitan and CoreWeave, when those shares are registered and sold, will be sold presumably at a profit. At some point, you'll need to return that cash to shareholders one way or another in the form of a dividend, cash, or stock, things like that. If you sold those shares in the third or fourth quarters of this year, when would that dividend be approved and paid? Would it be three months later, six months later, that kind of thing? Terrific.

Mark Klein (Chairman and CEO)

Thanks, Alex. Thank you for your ongoing interest and support in our company. As we've done in the past, and you're well aware, we try to be extremely communicative in respect to our dividend strategy, our dividend policy.

As we get clarity to net realized gains, we try to communicate that as expeditiously as possible to the public because it's important for investors to understand that. If we were in the position to have net realized gains by the end of the year, we would make a distribution by the end of the year. If there was some residual distribution that we'd have to make, we'd make it early in Q1. As you've seen in the past, we usually get way out in front of it for investors and tell everybody how we view it and how we plan to distribute that, how and when we plan to distribute those distributions.

Operator (participant)

Thank you. We do have a follow-up from Brian McKenna of Citizens. Please go ahead.

Brian McKenna (Director of Equity Research)

Okay. Thanks for the follow-up.

Apologize if I missed this, but I believe OpenAI's valuation roughly doubled since you invested in the company. So why is the investment only marked up about 60%? Did 100% of this markup close through in the quarter? Are you applying some kind of a discount to the stated valuation post the last round, or is it something else? Just trying to get some more color here.

Mark Klein (Chairman and CEO)

No problem. You had a $157 billion post-money valuation, and the pre-money valuation this round is $260 billion. The headline is approximately a double if you go from pre-money to post-money, but the actual increase is quite a bit less.

Operator (participant)

Thank you very much. I would like to turn the call back over to Mark Klein for any closing remarks.

Mark Klein (Chairman and CEO)

Again, thank you, everyone, for joining the call. We greatly appreciate your interest in our company.

To all of you that asked questions, thank you again for your interest and support. Feel free to reach out to us through our investor portal. It would be our pleasure to be communicative with you. Thank you again for all. Appreciate it.

Operator (participant)

Thank you very much. Once again, that does conclude today's conference. We do appreciate your participation.

View Q1 2025 Earnings Summary