Ares Capital (ARCC) Q2 2024 earnings summary

Executive summary

• Core EPS for Q2 2024 was $0.61 per share, up from $0.58 in Q2 2023, with GAAP net income per share at $0.52, and net investment income at $358 million ($0.58 per share), driven by robust investment activity and credit performance.

• Net asset value per share increased to $19.61 as of June 30, 2024, from $18.58 in Q2 2023 and $19.24 at year-end 2023.

• Total portfolio at fair value reached $24.97 billion, up from $23.12 billion in Q1 2024 and $21.50 billion in Q2 2023.

• Declared a Q3 2024 dividend of $0.48 per share, marking 15 consecutive years of stable or increasing dividends.

• New investment commitments for Q2 2024 totaled $3.9 billion, with 89% in first lien senior secured loans and 92% at floating rates.

Financial highlights

• Q2 2024 investment income was $755 million, up from $701 million in Q1 2024 and $634 million in Q2 2023.

• Net realized gains for Q2 2024 were $12 million, with net unrealized losses of $48 million.

• Weighted average yield on debt and income-producing securities was 12.2% as of June 30, 2024, stable year-over-year.

• Stockholders’ equity rose to $12.36 billion from $11.87 billion in Q1 2024 and $10.35 billion in Q2 2023.

• Debt/equity ratio was 1.06x as of June 30, 2024.

Outlook and guidance

• Declared a Q3 2024 dividend of $0.48 per share, payable September 30, 2024.

• Estimated taxable income spillover of $635 million for 2024 distributions.

• As of July 24, 2024, investment backlog and pipeline totaled approximately $2.9 billion and $40 million, respectively.

• Over $5 billion in available liquidity and a net debt to equity ratio of approximately 1.0x support continued investment activity.

• Management continues to focus on first lien senior secured loans and floating rate structures.