Hercules Capital (HTGC) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 2025 net investment income of $88.7 million ($0.50 per share), up 7.7% year-over-year, and total investment income of $137.5 million, up 10% year-over-year.

• Ended Q2 2025 with $785.6 million in available liquidity and over $1 billion including adviser funds, supported by investment grade credit ratings from four agencies.

• Portfolio focused on high-growth, venture-backed companies, with 97.8% floating rate loans and 91% first lien senior secured debt.

• Closed a $350 million institutional investment grade bond offering due 2030 and upsized the MUFG-led credit facility to $440 million.

• Adviser subsidiary's fourth private credit fund had its first close, bringing total managed capital to $1.6 billion across four funds.

Financial highlights

• Record Q2 2025 total gross fundings of $709.1 million, up 53.7% year-over-year, and total investment income of $137.5 million, up 10% year-over-year.

• Net asset value per share increased 2.5% quarter-over-quarter to $11.84 as of June 30, 2025.

• Return on equity in Q2 was 17.1%; GAAP effective yield 13.9%, core yield 12.5%.

• Early loan repayments in Q2 2025 totaled $267.4 million, up 102.9% sequentially.

• Net realized losses of $57.6 million in Q2 2025, offset by $47.8 million in net unrealized appreciation.

Outlook and guidance

• Q3 is expected to be seasonally slow for new originations, but full-year 2025 is projected to achieve record fiscal year commitments and fundings.

• Maintains a robust pipeline with $480 million in signed non-binding term sheets as of July 28, 2025, and $471.5 million in unfunded commitments.

• Asset-sensitive portfolio with 97.8% floating rate loans and interest rate floors, positioning for higher net investment income if rates rise.

• Core yield for Q3 expected at the high end of 12.2%–12.5% guidance range.

• Remains bullish on funding activity for the second half of 2025 and expects exit activity to accelerate toward year-end.