Carlyle Secured Lending (CGBD) Q1 2025 earnings summary

Executive summary

• Net investment income for Q1 2025 was $0.40 per share; adjusted NII was $0.41 per share, with an annualized yield of ~10% on $16.63 NAV.

• NAV per share declined to $16.63 as of March 31, 2025, from $16.80 at year-end 2024.

• Completed the CSL III merger, issuing 18.9 million shares and increasing portfolio fair value by $485.7 million.

• Portfolio comprised 195 investments in 138 companies across 25+ industries, with 94% in senior secured loans.

• Declared a $0.40 per share dividend for Q2 2025, with $0.85 per share of spillover income supporting the base dividend.

Financial highlights

• Total investment income for Q1 2025 was $54.9 million, flat versus prior quarter, with net investment income of $20.8 million.

• Total expenses rose to $33 million, mainly due to higher interest expense from increased debt.

• Net realized and unrealized losses were ~$7.6 million, partly due to a markdown on Maverick and higher non-accruals.

• Net income per share was $0.25, with basic and diluted EPS for Q1 2025 at $0.25.

• Non-accrual investments rose to 1.6% of portfolio fair value, up from 0.6% at year-end.

Outlook and guidance

• Q2 earnings expected to reflect full impact of the merger, with NII per share anticipated to remain in Q1's range.

• Portfolio yield on income-producing investments was 10.9% as of March 31, 2025.

• Management expects continued focus on U.S. middle market secured lending, leveraging Carlyle's platform.

• Dividend policy remains stable, with a $0.40 per share dividend declared for Q2 2025.

• Target leverage is one-to-one, with plans to reach this over the next two quarters as originations pipeline remains strong.