Executive Summary

Adjusted net investment income was $0.36 per share (GAAP NII $0.40), reflecting an adjusted annualized NII ROAE of 14% and regular dividend coverage of 106% for Q3 2024 .
The Board declared a $0.34 regular dividend and a $0.10 special dividend payable December 31, 2024; authorization to repurchase up to $50 million of common stock was re-approved .
Non-accruals improved sequentially to 3.8% of fair value (9.3% of cost), with Pluralsight returned to accrual following restructuring; NAV per share declined 0.9% QoQ to $10.11 on markdowns in certain names .
Liquidity remained strong at ~$582 million with net leverage at 1.08x; 2024 notes were repaid and the Operating Facility maturity extended to 2029, modestly lifting the weighted average cost of debt to 5.43% .

What Went Well and What Went Wrong

What Went Well

Dividend coverage remained robust: “Our dividend remains well covered at 106%,” with adjusted NII of $0.36 per share and adjusted annualized NII ROAE at the high end of historical levels (14%) .
Credit progress: Pluralsight was removed from non-accrual post recapitalization; overall loans on non-accrual fell to 3.8% FV as one company exited non-accrual despite one addition .
Capital position and portfolio mix: 91% senior secured and 81% first lien, with ~13.4% weighted average annual effective yield on performing debt and 92.7% floating rate, supporting recurring income resilience .

Quote: “At quarter end, our portfolio remained well diversified with 156 investments primarily in senior secured, first-lien loans. We have a strong capital and liquidity position…” .

What Went Wrong

NAV pressure: NAV per share declined to $10.11 (from $10.20), driven by markdowns in Gordon Brothers, SellerX, and InMoment, and one new non-accrual (Razor preferred) .
Higher funding costs: Weighted average interest rate on debt outstanding rose to 5.43% (vs. 5.00% in Q2), and interest expense per share increased partly due to timing and cash carry ahead of note repayment .
Yield compression: New investments’ weighted average yield (11.3%) was below exited investments (13.4%), reflecting tighter spreads and disciplined underwriting that limited repricings .

Financial Results

Income and Earnings vs Prior Periods

Metric	Q1 2024	Q2 2024	Q3 2024
Total Investment Income ($USD Millions)	$55.7	$71.5	$70.9
Total Investment Income Per Share ($USD)	$0.90	$0.84	$0.83
Net Investment Income Per Share (GAAP)	$0.46	$0.42	$0.40
Adjusted Net Investment Income Per Share	$0.45	$0.38	$0.36
Net Increase (Decrease) in Net Assets from Operations Per Share	$0.08	$(0.60)	$0.25
Adjusted Annualized NII ROAE (%)	14.7%	14%	14%

Portfolio KPIs

KPI	Q1 2024	Q2 2024	Q3 2024
NAV Per Share ($)	$11.14	$10.20	$10.11
Non-Accruals (% of Portfolio, FV)	1.7%	4.9%	3.8%
Non-Accruals (% of Portfolio, Cost)	3.6%	10.5%	9.3%
Weighted Avg Annual Effective Yield – Debt (%)	14.1%	13.7%	13.4%
First Lien (% of Portfolio)	80.2%	81.3%	81.3%
Floating Rate (% of Debt Investments)	97.1%	93.4%	92.7%
# of Portfolio Companies	157	158	156
Total Portfolio Fair Value ($USD Billions)	~$2.1	~$2.0	~$1.9
Available Liquidity ($USD Millions)	$408.7	$779.8	$581.8
Net Leverage (x)	1.08x	1.13x	1.08x
Weighted Avg Interest Rate on Debt (%)	5.08%	5.00%	5.43%

Investment Activity and Yields

Metric	Q1 2024	Q2 2024	Q3 2024
New Investments ($USD Millions)	$20.0	$129.7	$72.8
Proceeds from Sales/Repayments ($USD Millions)	$24.3	$185.0	$139.2
Weighted Avg Yield – New Investments (%)	14.7%	12.6%	11.3%
Weighted Avg Yield – Exited Investments (%)	14.0%	14.2%	13.4%

Dividend Coverage

Metric	Q1 2024	Q2 2024	Q3 2024
Regular Dividend Declared ($/share)	$0.34 (for Q2)	$0.34 (for Q3)	$0.34 (for Q4)
Special Dividend Declared ($/share)	—	—	$0.10
Coverage (Adj NII / Regular Dividend)	132%	112%	106%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Regular Dividend	Q4 2024	$0.34 (ongoing level)	$0.34	Maintained
Special Dividend	Q4 2024	None	$0.10	Raised (New)
Stock Repurchase Authorization	Ongoing	Up to $50M (re-approved Apr 27)	Up to $50M (re-approved Aug 1)	Maintained
Operating Facility Maturity	Facility	2026	Extended to 2029	Extended
2024 Notes	Debt	Outstanding $250M at Q2	Paid off Aug 23, 2024	Delevered

Note: TCPC does not provide formal revenue/EPS/OpEx/Tax guidance in filings; dividend policy and capital program updates are the primary forward-looking items .

Earnings Call Themes & Trends

Topic	Q1 2024 (Prior-2)	Q2 2024 (Prior-1)	Q3 2024 (Current)	Trend
Non-Accruals & Credit Resolution	5 companies; 1.7% FV; aggregators/Edmentum/Aventiv discussed	Increased to 4.9% FV; SellerX added; restructuring losses	Improved to 3.8% FV; Pluralsight back on accrual; Razor preferred to non-accrual	Stabilizing/improving sequentially
Dividend Coverage & Specials	Adj NII $0.45; 132% coverage; declared Q2 dividend	Adj NII $0.38; 112% coverage; declared Q3 dividend	Adj NII $0.36; 106% coverage; declared $0.34 + $0.10 special	Coverage robust; added special
Capital & Liquidity/Leverage	Liquidity $409M; net leverage 1.08x; plan to address 2024 notes	Liquidity $780M; net leverage 1.13x; issued 2029 notes; amended facility	Liquidity $582M; net leverage 1.08x; repaid 2024 notes; facility to 2029	Healthy; deleveraging
Rate Environment & Prepay Activity	Elevated base rates; mix supports income	Prepayment premiums ~$0.07/share; spreads tightening	Prepayment premiums ~$0.08/share; expect some NII reversal as base rates decline	Prepay activity up; rates easing
Amazon Aggregators	Sector challenges; consolidation thesis (Thrasio/Razor)	SellerX on non-accrual; continued restructuring	Aggregators ~5.9% of FV; consolidation expected to drive efficiencies	Managed exposure; restructuring
Leadership/Platform	Combined with BCIC; fee cuts; platform scale	COO appointment; pipeline building	CEO transition to Phil Tseng; global direct lending unit synergy; focus on core middle market	Leadership transition; platform synergy

Management Commentary

“We delivered solid adjusted net investment income of $30.8 million, or $0.36 per share… adjusted annualized NII return on average equity of 14%… dividend remains well covered at 106%” (Raj Vig) .
“Loans on non-accrual status declined from 4.9% to 3.8% of portfolio fair value… Pluralsight removed from non-accrual… Razor preferred equity on non-accrual” (Raj Vig) .
“All the new debt investments in the third quarter were first lien loans… portfolio weighted average annual effective yield of our performing debt portfolio was 13.4%” (Phil Tseng) .
“Available liquidity was $582 million… net leverage was 1.08x… weighted average interest rate on debt outstanding… 5.4%” (Erik Cuellar) .
“Not an indication of strategy shift… core middle market… differentiated structures including covenants and premium yields” (Phil Tseng, on global DL unit) .

Q&A Highlights

NII sustainability and rate sensitivity: Management expects some NII reversal as base rates decline but continues to target covered dividends; prepays may remain episodic yet elevated given M&A/refi pickup .
Aggregators exposure: Aggregators ~5.9% of FV; confidence in leaders and consolidation to drive efficiencies; ongoing restructuring engagement .
Funding costs/interest expense: Higher interest expense in Q3 driven by refi of 3.9% 2024 notes at higher incremental rates and carrying cash ahead of repayment; normalization expected in Q4 .
SBA capacity: $10 million remaining under current license; potential for second license as pipeline develops .
Shareholder spillover/special dividend rationale: Balance between minimum distribution requirements and excise tax; special dividend mitigates spillover into year-end .

Estimates Context

Wall Street consensus via S&P Global: EPS and revenue consensus for Q3 2024 were unavailable at time of analysis due to data access limitations. As a result, no estimate comparison could be provided; please note unavailability and consider re-checking later (S&P Global Capital IQ) (consensus not retrieved due to API limit) [functions.GetEstimates errors].

Where estimates are needed for trading decisions, we recommend checking updated S&P Global consensus for “Primary EPS Consensus Mean” and “Revenue Consensus Mean” once access is restored.

Key Takeaways for Investors

Dividend durability remains the central pillar: 106% coverage on adjusted NII and an incremental $0.10 special suggest confidence in recurring earnings despite modest rate headwinds .
Credit normalization underway: Sequential decline in non-accruals and resolution progress (Pluralsight back on accrual) point to improved trajectory, though markdowns in select names remain a watch item .
Yield compression vs risk discipline: New deal yields have tightened (~11.3% vs 13.4% on exits), but TCPC is declining repricings at weaker structures, preserving downside protection amid tighter spreads .
Balance sheet and liquidity support deployment: Net leverage at 1.08x, $582M liquidity, and 2024 note repayment lower refinancing risk; facility maturity extension adds flexibility .
Aggregator exposure contained and actively managed: ~5.9% FV concentrated in leaders with ongoing consolidation; outcomes depend on restructuring execution and macro consumer trends .
Near-term trading: Special dividend and credit improvement are positive catalysts; caution warranted on NII sensitivity to rate cuts and potential further markdowns in a handful of names .
Medium-term thesis: Core middle market focus, first-lien concentration, and BlackRock platform synergies should sustain premium risk-adjusted returns; watch non-accrual resolution pace and spread environment for re-acceleration .

BlackRock TCP Capital Corp. (TCPC)·Q3 2024 Earnings Summary