Blue Owl Technology Finance (OTF) Q2 2024 earnings summary

Executive summary

• Portfolio consisted of 68.7% first lien senior secured debt, 5.6% second lien, 5.2% unsecured debt, 13.3% preferred equity, and 7.2% common equity as of June 30, 2024.

• Net asset value per share decreased to $16.74 from $17.03 at year-end, mainly due to unrealized depreciation.

• Net leverage stood at 0.73x debt-to-equity, with $6.16 billion in investments across 141 portfolio companies.

• Two portfolio companies were on non-accrual status at quarter-end.

Financial highlights

• Total investment income for Q2 2024 was $174.2 million, up slightly from $171.2 million in Q2 2023.

• Net investment income after taxes for Q2 2024 was $101.8 million, compared to $87.2 million in Q2 2023.

• Net change in unrealized loss was $(93.1) million for Q2 2024, versus a $26.6 million gain in Q2 2023.

• Net realized loss for Q2 2024 was $(24.3) million, compared to $(15.5) million in Q2 2023.

• Net increase in net assets from operations was $8.1 million for Q2 2024, down from $113.8 million in Q2 2023.

Outlook and guidance

• Management expects investment income to vary with origination and repayment pace.

• Portfolio quality remains consistent, with focus on recession-resistant sectors and sponsor-backed borrowers.

• Originations are expected to match or exceed repayments in coming quarters.