WhiteHorse Finance (WHF) Q3 2025 earnings summary

Executive summary

• Net investment income for Q3 2025 was $6.1 million ($0.263 per share), down from $6.6 million ($0.282 per share) in Q2 and $9.2 million in Q3 2024, reflecting disappointing results due to interest rate cuts, spread compression, and portfolio markdowns.

• Net asset value (NAV) per share declined to $11.41 at September 30, 2025, from $11.82 in Q2 and $12.31 at year-end 2024.

• Portfolio fair value was $568.4 million, with 125 positions across 66 companies.

• Board reset the quarterly distribution to $0.25 per share and authorized a $15 million share repurchase program, with a temporary reduction in the incentive fee to 17.5% for two quarters.

• Ongoing portfolio repositioning and restructuring of underperforming credits remain a focus.

Financial highlights

• Total investment income for Q3 2025 was $17.7 million, down from $18.8 million in Q2 and $22.9 million in Q3 2024.

• Net realized and unrealized losses totaled $6.7 million in Q3 2025.

• Weighted average effective yield on income-producing debt investments was 11.6%, down from 11.9% in Q2.

• Asset coverage ratio for borrowings was 180.7% at quarter end.

• Net effective debt-to-equity ratio was 1.07x, down from 1.22x in Q2.

Outlook and guidance

• The $0.25/share quarterly distribution is intended as a sustainable base, with potential supplemental distributions if earnings exceed the base.

• Management expects continued pressure on yields and investment income due to non-accruals and lower portfolio size.

• Adviser voluntarily reduced incentive fee from 20% to 17.5% for two quarters.

• Non-accrual assets are expected to remain so for 12-24 months, with recoveries dependent on multi-year turnaround efforts.

• Focus remains on active portfolio management and risk mitigation.