Triplepoint Venture Growth BDC Corp. Aktie

Good afternoon, ladies and gentlemen. Welcome to the TriplePoint Venture Growth BDC Corp. Second Quarter 2026 Earnings Conference Call. [Operator Instructions] This conference call is being recorded, and a replay of the call will be available and an audio webcast on the TriplePoint Venture Growth website. Company management is pleased to share with you the company's results for the second quarter of 2026.

Today, representing the company is Jim Labe, Chief Executive Officer, Chairman of the Board; Sajal Srivastava, President and Chief Investment Officer; and Mike Wilhelms, Chief Financial Officer.

Before I turn the call over to Mr. Labe, I'd like to direct your attention to the customary safe harbor disclosure in the company's press release regarding forward-looking statements and remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial conditions, which are considered forward-looking statements under federal securities law. You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. The company does not take any obligation to update any forward-looking statements or projections unless required by law.

Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflect management's opinions only as of today. To obtain copies of the latest SEC filings, please visit the company's website at www.tpvg.com.

Now I'd like to turn the conference over to Mr. Labe. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to TPVG's second quarter earnings call. During the second quarter, we made steady progress in strengthening TPVG's portfolio and financial position as we continue to take steps to enhance our portfolio's durability, grow our income-generating assets and increase NAV to create long-term shareholder value. During the quarter, we continued with our diversification strategy by investing in venture growth stage companies across AI and other attractive investment sectors.

Starting with some key highlights. During the quarter and subsequent to the end of the quarter, we monetized 2 investments, enabling us to further strengthen our liquidity position and enhance our financial flexibility for the benefit of shareholders. We also funded more than $47 million in debt investments, up more than 80% from the previous quarter, finishing at the high end of our guided range as we took advantage of the strong market demand.

During the quarter, we signed $306 million of term sheets with venture growth stage companies at our sponsor, TriplePoint Capital, which was an increase of 20% over the previous quarter. Our venture growth stage pipeline now exceeds more than $3 billion of deals under evaluation. Against a strong market demand, we have been maintaining yields on our new investments while also continuing to rotate our portfolio out of legacy 2020 through 2022 vintage investment sectors and into our sectors of focus on new investments.

Our debt investments allocated to TPVG also climbed notably during the second quarter. Our leverage remains steady in our target range, our unfunded commitments continue to decrease significantly and our NAV increased slightly. As mentioned, we're pleased to have monetized 2 significant investments, exiting our largest outstanding loan position and selling another portion of our equity stake in Revolut, generating collectively total cash proceeds of approximately $57 million. These 2 transactions represent important steps in our ongoing efforts to rebalance the portfolio and strengthen our liquidity. They also demonstrate our progress in rotating through legacy positions, providing both liquidity and decreasing PIK income. And with Revolut, one of Europe's most valuable private technology companies where we monetized only a portion of our sizable equity position. This enhanced liquidity from these 2 monetization events provides us with greater financial flexibility in the coming quarters.

Turning to the VC market. The overall bench capital markets remained exceptionally active during the second quarter. According to PitchBook, second quarter deal value was the second highest quarterly total in a decade, trailing only in the first quarter of 2026. Through the first half of the year, 413 billion was deployed into U.S. venture-backed companies, a half year figure that already exceeds the full year 2025 total. AI continues to define market activity. AI companies represented 86% of all the venture dollars in the period, in fact. Venture-backed AI companies also command to demand materially higher valuations over their non-AI peers, and they're definitely achieving faster valuation step-ups between the rounds.

On the exit side, we're also encouraged by the increased market liquidity. Quarterly venture-backed IPO and M&A activity has been steadily increasing and OpenAI and Anthropic have confidence we filed for offerings of their own. During the quarter, one of our portfolio companies, Kalderos was acquired by Model N, a PE-backed company for a sizable consideration. Should venture-backed IPO and M&A activity continue to build momentum in the back half of 2026 and beyond, other TPVG portfolio companies could potentially be a beneficiary.

As I've mentioned previously, we maintain a sizable warrant and equity portfolio that continues to grow. When you exclude the $13 million we monetize from Revolut, this marks the sixth consecutive quarter and ninth out of the previous 10 quarters, where our warrant and equity portfolio increased in value. As of June 30, we hold warrant positions in 117 portfolio companies and equity investments in 60. A number of these have been identified in various publications list of top candidates for venture-backed IPOs, not only here in the U.S. but also in Europe.

Turning to the portfolio. We're pleased to see continued strengthening as fundraising activity increased significantly in the first half. Reflecting the strength of the VC market, 3 of our debt portfolio companies raised incremental capital in private financing rounds during the quarter, including [ Inspiron ], Haradu and Hover bringing the year-to-date total to 10 companies raising approximately $1.2 billion. We also continued to execute on the path of investment sector rotation and portfolio diversification across AI, but also other attractive sectors. Specifically, we invested in companies such as [indiscernible] and Skyflow. And our priority remains on backing what we believe are category-defining companies at the forefront of adopting and deploying AI across their product offerings. We're benefiting from the AI investment megacycle, bolstered by more than $1 trillion in AI infrastructure build-out, which helps fuel our demand.

We also benefit from increasing investments in other sectors such as cybersecurity, robotics, defense and aerospace, energy, resources and health tech. Our deal flow has also increased from the VC firms that we work with, many of which have raised multibillion dollar funds in the last few years alone. Finally, as Mike is going to get into the details, today, we're announcing a supplemental distribution of $0.12 per share to our shareholders.

In summary, we continue to make steady progress in strengthening our portfolio and positioning the company for long-term success. We recognize there is meaningful work ahead for sure. and we remain focused on disciplined underwriting, strengthening the balance sheet, diversifying our portfolio and reducing exposure to legacy investment sectors, while we capitalize on the AI-driven tailwinds out there and the attractive market opportunities to enhance our earnings power over the long term.

With that, let me turn the call over to Sajal.

Thank you, Jim, and good afternoon. Q2 was another quarter of disciplined execution as we continue to build a strong foundation and position TPVG for the long term.

Beginning with investment activity, TriplePoint Capital signed $307 million of term sheets with venture growth stage companies during Q2, up from $256 million of signed term sheets during Q1 2026. With regards to new investment allocation to TPVG during the second quarter, our adviser allocated $29.8 million in new commitments with 5 companies to TPVG as compared to $1 million of new commitments with 2 companies in Q1. We expect to continue to increase our allocation of new commitments as unfunded commitments continue to expire and as we receive prepayments and repayments over the rest of the year.

During the quarter, our fundings at $47.8 million to 10 companies were at the high end of our guided range of $25 million to $50 million. These funded investments carried a weighted average annualized portfolio yield of 12.8%. This compares to $26.6 million of fundings to 7 companies in Q1 with an average annualized portfolio of 12.9%. During Q2, we had $28.6 million in loan prepays, resulting in an overall weighted average portfolio yield of 12.9%. And excluding prepays, our core portfolio yield was 12.3%. This compares to $23.6 million of loan prepays and overall weighted average portfolio of 13.5% with prepays and 12.6% without prepays in Q1. Subsequent to the end of the quarter, we sold our debt and equity investments in our European portfolio company, Prodigy Finance, to a third party for $43.8 million, consistent with our Q2 mark. Prodigy was our largest outstanding loan as of Q2, and the sale demonstrates continued progress on our goals of rotating our assets into newer vintages diversifying the portfolio and reducing our overall exposure to PIK income.

Although we continue to see robust demand for debt financing from venture growth stage companies, our quarterly target for new funding continues to be in the $25 million to $50 million range for 2026. As Mike will cover shortly, we intend to redeploy the Prodigy proceeds strategically as we continue to position TPVG for the long term. With regards to credit activity during the second quarter, we downgraded trendy in EBITDA positive and cash flow positive consumer company from White (2) to the Yellow (3) and made fair value adjustments on other loans as well due to market factors and/or performance, including rolling. As Jim mentioned, during the quarter, portfolio company Kalderos, was acquired by Model N and in conjunction with the acquisition, the company prepaid its $12.4 million outstanding loan, and we realized a $300,000 gain on our warrants.

As of Q2, we held warrants in 117 companies and equity investments in 60 companies with a total fair value of $143 million. Revolut continues to perform well with the company announcing a transaction at a $115 billion valuation in media reports mentioning the company is considering an IPO with $150 million to $200 million valuation target. During the quarter, we participated in Revolut share buyback program under which we sold a portion of our equity shares, resulting in a $12.8 million realized gain with our remaining warrant equity investments having a fair value of $48 million as of the end of the quarter. The playbook continues to be focused on building a strong foundation for TPVG and positioning TPVG for the long term, by further strengthening our balance sheet, driving portfolio scale and quality, rotating the portfolio into new advantages, increasing the earnings power of our business and growing net asset value and shareholder value over the long term.

With that, I will now hand the call over to Mike.

Thank you, Sajal, and good afternoon, everyone. Total investment and other income for the second quarter was $22.1 million. Our weighted average annualized portfolio yield on debt investments was 12.9% compared to 13.5% in the prior quarter. The decrease primarily reflects lower accelerated income from prepayment activity.

Excluding accelerated income from prepayments, our weighted average annualized portfolio yield was 12.3% compared to 12.6% in the prior quarter. The decline primarily reflects lower fees from the expiration of unfunded commitments. Roughly 2/3 of our debt investments remain floating rate, and the majority of those loans remain at their prime rate floors. Combined with our mix of fixed and floating rate liabilities, we believe the portfolio maintains an appropriate balance as we navigate an evolving interest rate environment. Net investment income for the quarter was $8.3 million or $0.21 per share compared to $9.1 million or $0.23 per share in the prior quarter. The sequential decline primarily reflects lower accelerated income from repayments, together with higher interest expense following the $200 million March refinancing, including realized and unrealized investment activity, net increase in net assets resulting from operations was $10.7 million or $0.26 per share.

PIK income continued to decline during the quarter to approximately $3 million, representing less than 14% of total investment income compared to 15% in the prior quarter and down from nearly 23% from the same prior year period. Reducing PIK exposure remains central to our repositioning strategy and a key driver of durable, high-quality earnings over time. As Sajal noted, the disposition of Prodigy represents another meaningful step in that repositioning process and is expected to further reduce PIK income while improving the quality of the portfolio's recurring earnings.

Net asset value increased modestly to $8.67 per share from $8.65 per share at the end of the prior quarter. During the quarter, we recognized $12.9 million of net realized gains, primarily from the partial monetization of our investment in Revolut as well as consideration received upon the exercise of warrants in 2 portfolio companies. These realized gains were largely offset by net unrealized depreciation primarily reflecting the reversal of previously recorded unrealized appreciation on investments realized during the quarter, together with unrealized depreciation within certain debt investments. Total operating expenses for the quarter was $13.6 million, net of the income incentive fee waiver compared to $13.2 million in the prior quarter. As mentioned earlier, the increase primarily reflects the higher cost of debt associated with the March refinancing.

Turning to the balance sheet. We funded $47.8 million in debt investments during the quarter while receiving $45.3 million of principal repayments and scheduled amortization. This reflects our continued disciplined approach towards portfolio construction and capital deployment. At quarter end, total liquidity was approximately $120 million, including roughly $15 million in cash and $105 million of available capacity under our revolving credit facility, an increase from $112 million at March 31. We also ended the quarter with gross leverage of 1.26x and net leverage of 1.22x, both modestly improved from the prior quarter and within our targeted leverage range.

In addition, during the quarter, DBRS reaffirmed the company's investment-grade credit rating of BBB low with a stable trend. We believe that affirmation reflects the progress we've made, strengthened the company's balance sheet and supports our ongoing liability management strategy. Unfunded commitments declined meaningfully during the quarter to $141 million from $207 million at March 31. Approximately $23 million of those commitments were dependent upon portfolio companies reaching certain milestones with the balance well laddered over the next several years. As Jim noted earlier, given the strength of origination activity across the broader platform, we would expect unfunded commitments to normalize modestly over time as we selectively commit capital to new investment opportunities while maintaining our disciplined approach with leverage and liquidity.

During the quarter, the adviser earned approximately $1.3 million of income incentive fees, all of which were waived. As a reminder, the existing income incentive fee waiver remains in place through the end of fiscal 2026. Subsequent to quarter end, we completed the disposition of our Prodigy investment at their June 30 fair value together with accrued cash interest. Combined with the partial monetization of our Revolut investment, these transactions have meaningfully enhanced our financial flexibility and provide additional optionality as we continue to thoughtfully allocate capital across new originations and actively manage the balance sheet. Also subsequent to quarter end, our Board declared a supplemental dividend totaling $0.12 per share payable in 2 equal installments on September 30, 2026 and December 30, 2026. The supplemental dividend reflects the distribution of undistributed taxable income from the prior year and should be viewed separately from the company's recurring quarterly dividend.

Our objective continues to be to improve the quality of the portfolio and its long-term earnings power while strengthening the balance sheet, maintaining prudent leverage and preserving the financial flexibility to allocate capital to opportunities we believe will create long-term shareholder value. That concludes my prepared remarks. Operator, please open the lines for questions.

[Operator Instructions] Our first question for today will come from Crispin Love with Piper Sandler.

Can you discuss the competitive environment that you're seeing in venture lending today? What are you seeing with regards to banks and nonbanks in the space?

Yes. I would say that -- this is Jim speaking. There really hasn't been a meaningful change from a competitive standpoint, at least for us, the biggest competition is equity, given what's going on in the market, and that hasn't changed, and that's been over time. When it comes to other banks and nonbanks, we're definitely seeing a step-up of interest in commercial banks, particularly given the increase in venture equity. And there's been a trend and we're part of it of working and partnering with commercial banks as opposed to competing against them. I haven't seen any significant changes on the nonbank versus nonbank side. There's still very few folks that are participating at any kind of scale in this segment as well as none of which have the advantages of the differentiators, relationship, reputation, experience and other structural things that we have here at TriplePoint.

Great. I appreciate that. And then can you discuss the process of selling the Prodigy loan, I think, subsequent to quarter end. Was this something that you've been looking to do for multiple quarters for this loan specifically? And then is there any detail that you're able to share on the buyer, at least broadly?

I would say, again, as we thought about our goal of repositioning TPVG and positioning it for the future. So I think we looked at criteria of portfolio diversification, income generating cash or income generating assets. So I think as part of our strategy, we identified that loan as one that would make sense to liquidate or generate liquidity against. And so we conducted a process in coordination with the company, and we're able to coordinate or identify a European lender that was familiar with the company, and we were able to transact the transaction with them. I think details will be in our [ queue ], but relatively straightforward transaction.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jim Labe for any closing remarks. Please go ahead, sir.

As always, I'd like to thank everyone for listening and participating in today's call. We look forward to updating and talking with you all again next quarter. Thanks again, and everyone, have a nice day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, ladies and gentlemen. Welcome to the TriplePoint Venture Growth BDC Corporation First Quarter 2026 Earnings Conference Call. [Operator Instructions] This conference is being recorded, and a replay of the call will be available in an audio webcast on the TriplePoint Venture Growth website.

Company management is pleased to share with you the company's results for the first quarter of 2026. Today, representing the company is Jim Labe, Chief Executive Officer and Chairman of the Board; Sajal Srivastava, President and Chief Investment Officer; and Mike Wilhelms, Chief Financial Officer.

Before I turn the call over to Mr. Labe, I'd like to direct your attention to the customary safe harbor disclosure in the company's press release regarding forward-looking statements and remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial condition, which are considered forward-looking statements under federal securities law.

You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. The company does not undertake any obligation to update any forward-looking statements or projections unless required by law.

Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflect management's opinions only as of today. To obtain copies of our latest SEC filings, please visit the company's website at www.tpvg.com.

Now I'd like to turn the conference over to Mr. Labe. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to TPVG's first quarter earnings call. During the first quarter, we continued to take steps to position TPVG to strengthen its portfolio while maintaining our long-term emphasis on increasing its durability, income-generating assets and NAV to create enduring shareholder value.

We also remain focused on portfolio diversification into high-quality venture growth stage companies in AI and other attractive investment sectors. Touching on some highlights in the first quarter. We generated NII of $0.23 per share, covering our dividend and funded more than $26 million in debt investments within our guided range.

For the quarter, our weighted average annualized portfolio yield increased to 13.5% compared to 12.7% in the previous quarter. During the quarter, we lowered our gross leverage ratio and reduced our outstanding unfunded commitment obligations by 20% to $207 million. Meanwhile, our pipeline of venture growth stage companies at the TriplePoint Capital platform level remains strong and bodes well for TPVG to capitalize on attractive lending opportunities over the long term.

We also took additional steps to strengthen our financial flexibility during the quarter, and Mike will provide more details in his remarks. The overall venture capital markets continue to strengthen. In fact, PitchBook labeled the first quarter's VC market as one for the record books. According to PitchBook, venture capital deal value increased to $267 billion, with the quarter already exceeding every full year total, except for 2021 and 2025.

No surprise, but AI continued to dominate market activity, representing 89% of the first quarter deal value and 43% of the total deal count, both record highs. AI companies now represent roughly 45% of all U.S. market value and companies within the sector are completing new funding rounds at materially higher valuations, larger step-ups and a faster cadence than non-AI peers.

We expect this will continue to fuel the strong demand for venture lending and also be a benefit to our existing warrant and equity investment portfolio. Turning to the portfolio strategy. There's been no change, and we continue our ongoing path of investment sector rotation and portfolio diversification across AI and other attractive sectors such as verticalized software, fintech, aerospace and defense, robotics, cybersecurity and health tech, among others.

Our focus remains on borrowers in high potential durable sectors, including those leveraging AI to drive product differentiation, market disruption and efficiency. Our priority remains on backing category-defining companies at the forefront of applied AI infrastructure and deployment. Specifically, we're proud to support AI innovators and note that several of our AI and AI adjacent portfolio companies experienced value appreciation in the quarter.

This includes companies such as Edge AI, Standard Bots, Valar Atomics and Airalo, all of which raised new equity financing rounds at upticks in their valuations. In fact, in total, during the quarter, 8 active TPVG debt portfolio companies raised approximately $1.2 billion of equity, a meaningful increase from the fourth quarter when 2 companies raised a total of $71 million.

Touching on the role of software companies in the AI era, we want to reiterate our view on software and implications to our portfolio. Our investment posture has consistently been to finance the disruptors, not the disruptive. The companies we finance are not the legacy incumbents whose business models are threatened by AI. Our investments are in the nimble, AI native and AI-enabled companies.

We continue to believe AI will be a net tailwind to our software portfolio rather than a headwind or an existential threat. We're also encouraged by signs of increased growth-oriented activity to venture-backed companies, including strategic M&A activity, particularly in the AI infrastructure. In fact, one of our AI debt investments from last year, Observe AI, was acquired by Snowflake for $650 million during the quarter.

The transaction happened quickly and yielded an attractive return on our investment, plus the equity investment we held in Observe was exchanged for publicly traded shares in Snowflake, which is included in our portfolio as of quarter end. As a reminder, we have a sizable equity investment and warrant portfolio with warrant positions in 117 portfolio companies and equity investments in 60.

And as we've also previously noted, we hold warrant and/or equity positions in a number of companies that have appeared in industry publications on their notable top IPO candidates list, including Cohesity, ZEVS, Revolut, Dialpad, Filevine and others. We believe these holdings have the potential to be meaningful contributors to our returns in the future, assuming exit activity continues to increase.

TPVG also continues to have the strong support of our platform sponsor, TriplePoint Capital, a leader in the venture lending market with a highly regarded brand name and direct origination capabilities. In fact, our sponsor continued to execute on its discretionary share purchase program of TPVG stock during the quarter.

And as a further sign of TPC's commitment to TPVG, TPC is also the company's top shareholder, presently holding nearly 5% of the company's stock outstanding. Additionally, as we previously announced, the adviser waived its full quarterly income incentive fee for each quarter in 2026. Further demonstrating the company's commitment to implementing shareholder-friendly measures, the Board of TPVG has authorized a discretionary 12-month share buyback program of up to $12.5 million.

This is our third stock buyback program based on economic and market conditions over the last 10 years. We recognize there is meaningful work ahead to further strengthen the portfolio. We remain diligent on that effort and aiming to capture the powerful AI tailwinds in favorable market conditions.

As we look ahead, focus remains on disciplined underwriting, maintaining a prudent balance sheet, further diversifying our portfolio and continuing to rotate the book out of the legacy 2020 through 2022 vintage consumer sectors. At the end of the day, our short-term plan is grounded in steady execution quarter-over-quarter and step-by-step to increase our income-generating assets, earnings power and NAV to create enduring shareholder value over the long term.

With that, let me turn the call over to Sajal.

Thank you, Jim, and good afternoon. Q1 was another quarter of disciplined execution and progress as we continue to build a strong foundation and position TPVG for the long term. Beginning with investment activity, TriplePoint Capital signed $256 million of term sheets with venture growth stage companies during Q4, up from $207 million of signed term sheets during Q4 2025.

With regards to new investment allocation to TPVG during the first quarter, given the refinancing of our $200 million term debt tranche, where we elected to reduce our outstanding term debt and lean into our revolver as well as the current level of unfunded commitments, our adviser allocated $1 million in new commitments with 2 companies to TPVG as compared to $90 million of new commitments to 12 companies in Q4.

We expect to increase our allocation of new commitments as unfunded commitments expire and as we receive prepayments and repayment over the rest of the year. During the quarter, our fundings of $26.5 million to 7 companies were within our guided range of $25 million to $50 million for quarterly fundings. These funded investments carried a weighted average annualized portfolio yield of 12.9%.

This compares to $92.8 million of fundings to 16 companies in Q4 with an average annualized portfolio yield of 12%. The higher onboarding yields this quarter reflects asset mix as we funded fewer revolving and ABL loans and more term loans during the quarter in addition to slightly higher OID. During Q1, we had $23.6 million in loan prepays, resulting in an overall weighted average portfolio yield of 13.5%.

And excluding prepays, our core portfolio yield was 12.6% -- this compares to $44 million of loan prepays and overall weighted average portfolio of 12.7% with prepays and 12.1% without prepays in Q4. During the first quarter, our investment portfolio remained relatively flat as new fundings were offset by prepayment, repayments and amortization within the portfolio.

Our 55 obligor count remained consistent with Q4 as well. As mentioned last quarter, although we continue to see robust demand for debt financing from venture growth stage companies as demonstrated by our $103 million of new term sheets and $26 million of funding so far in Q2, our quarterly target for new fundings continues to be in the $25 million to $50 million range for 2026.

With regards to credit activity during the first quarter, Flink was upgraded from Yellow (3) to White (2) as a result of closing a strategic equity round and continued performance. Three consumer-related portfolio companies were downgraded during the quarter as a result of subsector headwinds and slower revenue or EBITDA growth, among other factors.

The first being Forum Brands, also known as Lyra Collective, which originally started out as a platform to acquire online e-commerce sellers and over the years has positioned and focused itself as a consumer product company -- sorry, consumer packaged goods company with brands in the personal care and family categories. Despite sector challenges and volatility from tariffs, Forum is starting to show growth year-over-year and continues to be EBITDA positive, both at its brand level and on a consolidated basis.

Outfittery, which is a German custom fashion subscription service for men and women, in 2025, merged with its direct competitor in Spain, Lookiero and continues to make progress in realizing synergies of its merger despite slower-than-expected growth and has near-term line of sight to meaningful EBITDA here in 2026.

Finally, Hydrow, a fitness-focused hardware and subscription company, has been experiencing industry-wide demand challenges. However, the company continues to make significant progress improving margins, cutting costs and growing EBITDA.

As Jim mentioned, during the quarter, one portfolio company, Observe, was acquired by Snowflake. In connection with the acquisition, the company prepaid its $16 million outstanding loan, and we received shares of Snowflake. This is a promising development, especially considering we funded our loan to Observe in Q4 2025 and bodes well for additional exit activity we anticipate over the course of 2026.

As of year-end, we held warrants in 117 companies and equity investments in 60 companies with a total fair value of $144 million, up $6 million from $138 million of fair value in Q4 with the primary driver being Revolut, which continues to perform exceptionally well with recent media reports mentioning the company is targeting an IPO with $150 million to $200 million valuation target.

Our playbook continues to be focused on building a strong foundation for TPVG and positioning TPVG for the long term by strengthening our balance sheet, driving portfolio scale and quality, rotating the portfolio into newer vintages, increasing the earnings power of our business and growing net asset value and shareholder value over the long term.

With that, I will now hand the call over to Mike.

Thank you, Sajal, and good afternoon, everyone. Total investment and other income for the first quarter was $22.8 million. Our weighted average annualized portfolio yield on debt investments was 13.5% compared to 12.7% in the prior quarter. The increase in yield reflects amendments on certain investments and accelerated income from prepayment activity, partially offset by lower base rates.

Approximately 2/3 of our debt portfolio remains floating rate and 79% of those loans are now at their prime rate floors. As a result, we expect the impact of any further interest rate reductions on our net investment income to be limited, particularly as lower base rates would also reduce interest expense on our floating rate borrowings under the revolving credit facility.

Net investment income for the quarter was $9.1 million or $0.23 per share compared to $9.9 million or $0.25 per share in the prior quarter. Net investment income for the quarter fully covered our $0.23 per share dividend. Net asset value as of March 31, 2026, was $8.65 per share compared to $8.73 per share at December 31, 2025.

As Sajal discussed in detail, we saw some migration within the portfolio, which contributed to a net unrealized loss of $7 million on active debt investments. An additional $2 million of unrealized losses were driven by foreign currency adjustments and reversals of previously recorded unrealized gains on investments realized during the period.

These unrealized losses were partially offset by $6.3 million of net unrealized gains on the warrant and equity portfolio, most notably from the Revolut fair value increase this quarter. Total operating expenses for the quarter were $13.2 million, net of income incentive fee waivers compared to $12.2 million in the prior quarter.

The increase in operating expenses quarter-over-quarter was primarily driven by higher interest rate expense following the March refinancing associated with the increased utilization of the revolving credit facility and higher coupon on the recently issued $75 million notes, partially offset by lower general and administrative expenses. During the quarter, $1.8 million of income incentive fees were earned but fully waived by the adviser.

As a reminder, the adviser's waiver of the quarterly income incentive fee remains in place through the end of fiscal year 2026. Turning to portfolio activity. We maintained a disciplined approach to new originations and fundings during the quarter. We funded $27 million of new debt investments and received $25 million of repayments during the quarter.

Consistent with our focus on reducing unfunded commitments, new originations to TPVG were limited to $1 million for the quarter. As of March 31, 2026, we had total liquidity of $112 million, including $9 million of cash and $103 million of availability under our revolving credit facility. As mentioned in our prior quarter call, we utilized our revolving credit facility and cash on hand to help address the March 2026 unsecured note maturity and reposition our capital structure.

Our fixed rate debt is now 56% compared to 80% at year-end. We remain within our target leverage range and ended the quarter with a gross leverage ratio of 1.27x, down from 1.33x in the prior quarter and a net leverage ratio of 1.25x compared to 1.20x in the prior quarter. We had $207 million of unfunded commitments at the end of the quarter, down from $260 million at year-end.

Of these commitments, approximately $51 million are milestone-based and contingent upon borrowers achieving specified performance targets. The remaining commitments continue to be well laddered over the next several years with approximately $97 million in the 9 months remaining in 2026, $83 million in 2027 and $27 million in 2028.

With the March 2026 debt maturity fully addressed, our capital management strategy remains focused on financial flexibility while optimizing our overall fixed to floating debt mix and managing our forward maturity profile. While certain maturities are more concentrated in 2028 as a result of recent refinancing activity, we are actively managing that profile and expect to address those opportunistically well in advance of their respective due dates.

We were pleased that in early April, DBRS reaffirmed our investment-grade credit rating at BBB low with a stable outlook, reflecting the strength of our platform and our continued focus on maintaining a prudent balance sheet. As mentioned by Jim, subsequent to quarter end, our Board authorized a 12-month stock buyback program to repurchase up to an aggregate of $12.5 million of its common stock in the open market at prices below net asset value per share in accordance with Rule 10b-18 under the Securities Exchange Act of 1934.

The timing, manner, price and amount of any share repurchases will be determined by the company based upon evaluation of economic and market conditions and other factors. We believe the program reinforces our focus on enhancing shareholder value.

In summary, we maintained a disciplined and selective approach during the quarter, actively managing the portfolio while maintaining dividend coverage and addressing our near-term liabilities. We remain focused on strengthening the portfolio and preserving balance sheet flexibility.

That concludes our prepared remarks. Operator, please open the line for questions.

[Operator Instructions] Our first question today is from Crispin Love with Piper Sandler.

This is Ben Graham on for Crispin Love. I'm just wondering if you could talk about where you're most interested in putting incremental capital today, at least broadly, what areas of technology you're most focused on?

And then on software specifically, there's obviously been a lot of noise and moves in the public markets. And I'm just wondering if software is an area where you see opportunities for debt investments? Or are you more likely to stay away from it in the near term?

Yes. I think -- this is Jim speaking. I think our future continues to be more in AI investing that is being done by the majority of the venture capital funds that we're working with and -- these are not legacy software, historic enterprise software kind of investments.

At the forefront of venture lending, this is the category that we're most interested in. But also, AI is a broad term. Obviously, some of the things I mentioned, cybersecurity, robotics, aerospace and defense and the other verticalized software areas are the ones that remain a strong part of our existing pipeline and future deals under evaluation.

Awesome. And then if you could also maybe just share your latest views on your expectations for M&A and IPO activity for the year. And speaking of this AI disruption, if that has sort of shifted your expectations given the market's reaction there?

Yes. As I mentioned briefly in the prepared remarks, the -- the AI valuations, we had one example of a company observed that we cited, but also it seems there has been a slow but steady pickup in M&A activity, and we are seeing increased interest in AI opportunities for mergers and acquisitions.

And more importantly, we're seeing in our warrant and equity portfolio an increase quarter-over-quarter and last quarter, in particular, in terms of interest levels, valuations for companies that could be prospective acquired M&A. Should tech IPOs come back for venture companies as well, there's a lot of signs there.

That could also help. But certainly, M&A activity is on the rise and interest levels in a number of our portfolio companies from this AI frothiness, however you want to think of it.

[Operator Instructions] The next question is from Paul Johnson with KBW.

So I was just wondering if I could just make it a little bit more clear. Mike kind of touched on this. In terms of the breakdown of the unrealized losses this quarter, I believe you said $7 million or loss related to the debt portfolio. Is that?

That's correct.

Okay. Is that credit related? Or is that more mark-to-market spread widening or some mix of the 2?

Those were primarily related to the 3 downgrades from White to Yellow that Sajal went through. So we had 3 downgrades in the quarter. And so that $7 million of unrealized losses was related primarily to those downgrades.

And then we also had about $2 million of FX-related unrealized losses, bringing us to roughly $9 million. And then as I mentioned, we had roughly $6 million of unrealized gains related to the Revolut markup. And so our net unrealized gains for the quarter -- sorry, our net unrealized loss for the quarter was roughly $3 million.

Got you. Okay. So primarily credit -- negative credit-related movements going negatively on the debt portfolio with the offset being primarily from the write-ups in those equity investments?

That's correct. equity and warrant investments. That's correct.

And then in terms of the loan amendments, were those amendments associated with those credits that you mentioned that were written down? Or were these just kind of normal course amendments to loans?

That was actually -- yes, I mentioned that in my prepared -- I think you're referring to what I mentioned as it related to our yield. And so that -- there were a few amendments, but most notably, there was an amendment to our -- one of our top 10 debt positions that was in the middle of an M&A activity and just looking to extend their term ever so slightly.

And so we paused the interest rates in the fourth quarter. So it was more of a function of the fourth quarter was -- the yield was a little muted given that amendment, and then we returned to a more normalized rate in the first quarter.

Got it. Okay. Yes, thanks for clarifying that. And then just wondering on the share repurchase, how interested you are, I guess, in being active with that? And I just ask given where you guys are at, I mean, at this point, you've seemed to kind of stabilize the portfolio, still some legacy stuff to work through.

You're waiving fees on top of that. But if you were active with the share repurchase at this point, I mean, scale of the BDC is one of the smallest in the space. I don't know if there's mean we all appreciate, of course, the benefit of the share buybacks. I don't know how much of a benefit there would be to reducing shareholder equity significantly more than where we're at today.

So I was just wondering to kind of get your thoughts on how active you would look to be utilizing that in the market based on where you are today?

Yes, understood. I mean when we initially sized it at the $12.5 million that was approved by the Board, the $12.5 million represents roughly 6% of our current market cap. We surveyed our respective BDC peers and found most fall between 5% to 7% of market cap. There are a few outliers that are closer to 10%.

So that was in part on our sizing. We also factored in our unfunded commitments, leverage and upcoming debt maturities also when we came to that, which I think, Paul, you're kind of alluding to is that we are factoring all of that in. As it relates specifically to your question as far as timing and how active we want to -- we recognize that it's a shareholder-friendly initiative.

We want to make a meaningful dent in that program, but we do need to keep in mind our unfunded commitments and our overall liquidity. And so as far as timing on that, that's TBD. Did that answer your question, Paul?

Yes.

Showing no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jim Labe for any closing remarks.

As always, I'd like to thank everyone for listening and participating in today's call. We look forward to updating and talking with you all again next quarter. Thanks again, and have a nice day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, ladies and gentlemen. Welcome to the TriplePoint Venture Growth BDC Corp. Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions]

This conference is being recorded, and a replay of the call will be available in an audio webcast on the TriplePoint Vendor Growth website. Company management is pleased to share with you the company's results for the fourth quarter and full fiscal year of 2025. Today, representing the company is Jim Labe, Chief Executive Officer and Chairman of the Board; Sajal Srivastava, President and Chief Investment Officer; and Mike Wilhelms, Chief Financial Officer.

Before I turn the call over to Mr. Labe, I'd like to direct your attention to the cautionary safe harbor disclosure in the company's press release regarding forward-looking statements and remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial conditions, which are considered forward-looking statements under federal securities law.

You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. The company does not undertake any obligation to update any forward-looking statements or projections unless required by law. Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflect management's opinions only as of today. To obtain copies of our latest SEC filings, please visit the company's website at www.tpvg.com.

Now I'd like to turn the conference over to Mr. Labe.

Thank you, operator. Good afternoon, everyone, and welcome to TPVG's Fourth Quarter Earnings Call. 2025 was a year of meaningful progress and improved performance across the portfolio. We continue taking important steps aimed at increasing TPVG scale, durability, income-generating assets and NAV as we seek to create enduring shareholder value over the long term.

During the year, our team executed with discipline and focus proactively managing our portfolio and selectively capitalizing on opportunities with high-quality U.S.-based venture growth stage companies. We're pleased to have achieved progress in strengthening the portfolio during 2025 and continuing to resolve past credit situations while at the same time making strong progress on our path of portfolio diversification, geographic and investment sector rotation.

The portfolio continued to stabilize during the year with NAV increasing year-over-year from 2024 to 2025. We believe this reflects the progress we're making in creating a more durable platform form and portfolio that's supportive of increasing NAV over time. In 2025, the investment portfolio grew year-over-year. TPVG closed $508 million of new debt commitments to venture growth stage companies. This represents a significant increase from the $175 million we recorded back in 2024. And and it marks the highest levels of originations activity in over 2 years.

In the second half of the year, as expected, our fundings began to increase as we executed on the pipeline and existing borrowers through on their committed facilities amid the improvements in the venture landscape. We ended the year with $287 million in fundings more than double that of the previous year. The demand for venture debt remains active, and our platform ended the year with a pipeline exceeding $2 billion. We benefited from a notable uptick in venture capital investment activity throughout 2025.

According to PitchBook, venture capital deal value increased to $339 billion across more than 16,000 deals as of the end of 2025, second highest in a decade. Deal value in our core venture growth market segment rose 131% year-over-year. As a result of this strong market environment in 2025, we signed $1.2 billion of term sheets alone with venture growth stage companies at our sponsor, TriplePoint Capital, one of the largest center lending firms serving this market.

Taking a closer look at the portfolio throughout the year, we made significant progress diversifying our business with commitments to 8 new borrowers during the fourth quarter and 28 new borrowers in 2025. This was an increase of 250% over the previous year. These borrowers are all in what we believe are high potential durable sectors including those leveraging AI to drive product differentiation, market disruption and efficiency.

We continue to take advantage of this strong market demand, preferring companies with meaningful revenues strong margins, solid cash runways and at or near EBITDA positive or would pass to cash flow generation and debt service without the need for further equity fundraising.

Turning to our ongoing portfolio investment sector rotation and in particular, AI, we believe AI is no longer a cyclical theme. It's a structural multi-decade transformation reshaping every sector of the economy. AI alone represented 65% of the total U.S. venture deal value last year and 39% of the deal count, underscoring both the scale and the breadth of capital flowing into the space.

We expect this momentum to continue driving significant venture investment activity this year. and a sustained opportunity as a result for us in the years to come. Over the past, we've been proud to support innovative AI leaders in our portfolio such as observed etched Erado, Marvin, Incode and Encharge AI, among others. These companies reflect our strategy of backing what we believe to be category-defining companies at the forefront of applied AI infrastructure and deployment.

We'd be remiss not to discuss our current view of SaaS and the potential impact AI has in this industry. Despite persistent headwinds warning a SaaS Pokalipse, we believe concerns surrounding software and SaaS markets, especially those for inter-capital backed businesses are overstated. While this is clearly a headline issue, this is more problematic in our minds for PE sponsors and middle market lenders dealing with those legacy software companies in their portfolios and believe it's less relevant in the VC industry, particularly at these venture growth stages. We note that most of the TPVG portfolio companies in this space are typically considered AI native or AI-enabled companies and market disruptors, not to disrupt it and are leveraging AI natively to enhance product offerings or driving more efficient operations, or taking market share from those legacy incumbents.

As we highlighted in the last 4 earnings calls, we've been adding AI-enabled software companies ever since AI and the large language models began gaining widespread adoption in 2023. If you look at the makeup of our portfolio, while under 35% of our exposures could be classified in that broader software categories, 70% of those companies that we invested in were 2024 and 2025 vintage investments. All companies, which we invested in during the last 2 years during this AI era and all of them with AI enablement and tech forward AI attributes.

Importantly, even those vintages prior to 2024, only 5 companies by count are all made of an embedded vertical application software companies that are so entrenched and mission-critical it'd be a major challenge to replace them. It's not all AI. In addition to it, we continue to pursue opportunities in other diversified sectors, we're witnessing a renewed focus on American domestic priorities, particularly in aerospace and defense, infrastructure and the ongoing of advanced manufacturing.

Policy tailwinds and national security are driving notable capital market activity, reinforcing the durability of investment in those sectors. We're positioning TPVG to benefit directly from these secular trends through portfolio companies such as Perry Labs, US CT, Valor and standard bots among others. These are businesses that align with national priorities and are building mission-critical technologies. As capital increasingly flows towards these strategic sectors supported by federal policy and procurement reform, we believe venture-backed innovators in cybersecurity, aerospace, defense, robotics, energy and resources and advanced manufacturing will remain durable recipients of both equity and venture debt capital.

I'd say we're also encouraged by the health of the East venture market and some reemerging signs of liquidity with M&A and IPOs as the exit market continues to improve, we are well positioned to realize value for shareholders with our sizable equity and more portfolio. At years end, we held warrant positions in 118 portfolio companies and equity investments in 55.

As we've been mentioning, we have positions in several leading companies cited as top IPO candidates, including Cohesity, ZEVs, Revolut, Dialpad, file Vine, Grub market and others. Finally, in the first quarter of 2025 and building off the momentum of a strong year of performance -- we successfully refinanced our $200 million in 2026 notes. This further strengthens our capital structure and Mike will provide further details during his prepared remarks.

We intend to continue building on the momentum we experienced in 2025, positioning TPVG for growth and shareholder value creation. With the strong support of our sponsor, TriplePoint Capital, the parent of our investment adviser. TPC brings an exceptional brand name, reputation, proven track record, venture capital relationships and direct origination capabilities.

As we mentioned last quarter, our advisers income incentive fee waiver has been extended through 2026. And in addition, our sponsor also purchased on 1.8 million shares at TPVG during the third and fourth quarters under the discretionary share purchase program. In summary, we delivered measurable progress in 2025 and saw improved venture market conditions throughout the year.

As we look ahead, we're excited about the path forward and believe the combination of durable AI tailwinds, strong demand, disciplined underwriting and creative customized structuring places us in a strong position to capitalize on these market conditions in 2026 and beyond. Let me turn the call over now to you, Sajal.

Thank you, Jim, and good afternoon. 2025 was a year of disciplined execution as we continue to build a strong foundation and position TPVG for the long term.

Beginning with investment activity. TriplePoint Capital signed $207 million of term sheets with venture growth stage companies during Q4 and and $1.2 billion for the full year, up more than 60% from $736 million of signed term sheets in fiscal year 2024. With regards to new investment allocation to TPVG during the fourth quarter, our adviser allocated $90 million in new commitments with 12 companies to TPVG. 2/3 of the commitments made during the fourth quarter were to new portfolio companies, reflecting our focus on the obligor diversification and sector rotation.

For the full year, we closed $508 million of debt commitments with 28 new portfolio companies and 7 existing obligors, up almost 2x from the $175 million of debt commitments in 2024 with 13 companies. As mentioned during our Q3 call, in anticipation of prepayment and scheduled repayment activity during this quarter, we exceeded our guided range and funded $93 million in debt investments to 16 companies. These funded investments carried a weighted average annualized portfolio yield of 12%.

For the full year, we funded $287 million in debt investments to 31 companies, up more than 100% and from $135 million to 13 companies in 2024. The lower overall onboarding yields in 2025 reflect a number of factors in addition to the declining rate environment, including originating revolving loans, which enable us to be the sole lender to our portfolio companies, lending to more robust enterprises from a size and scale perspective, including EBITDA-positive companies. and lower OID as a result of reduced enterprise valuations.

During Q4, we had $44 million of loan prepays from relatively seasoned loans resulting in an overall weighted average portfolio yield of 12.7%. And excluding prepayments, our core portfolio yield was 12.1%. For the full year, we had $120 million of loan prepays as compared to $170 million of loan prepayments in fiscal year 2024. We also had $64 million of scheduled principal amortization and repayments under revolvers during the quarter. For the full year, we had $92 million of these payments, which together with the previously mentioned $120 million of prepays provided a substantial liquidity to reinvest in our portfolio and to us strategically as we refinance and optimize our go-forward debt stack.

During the fiscal year, our investment portfolio grew by over $100 million or 15%, and as a result of new fundings exceeding prepayment, repayment and amortization within the portfolio. Of our 55 obligors with outstanding loans as of year-end, even were added in 2024 and 22 were added in 2025. So progress on our plans for Abargor, vintage and sector rotation. Although we continue to see robust demand for debt financing from venture growth stage companies as demonstrated by our $155 million of new term sheets and $15 million of funding so far in Q1. And quarterly target for new funding continues to be in the $25 million to $50 million range for 2026 unless we have line of sight to higher-than-expected prepayment activity.

Two portfolio companies with debt outstanding raised $71 million of equity capital during the quarter. And for the full year, 15 debt portfolio companies raised $474 million of equity capital. Although down from 2024, it is not unexpected given the number of new obligors we have added in the past year. In addition, the pace of up round valuations has picked up which is reflected well in our credit quality as well as the warrant equity investments associated with these debt investments.

No new companies were added to our credit watch list during the quarter, and the weighted average credit ranking of our portfolio slightly improved from Q3. During the quarter, we saw a fair amount of prepayment and repayment activity, along with both net unrealized and net realized gains in the debt portfolio, from the resolution of credit situations in addition to fair value adjustments related to obligor performance, sector outlook changes and foreign currency exchange.

Briefly reviewing material updates across all of our credit rating categories. During the quarter, we had 2 Category 1 or clear rated obligors repay their loans. We added $72 million of loans to 13 obligors to Category 2 or white grading as a result of new investment activity offset by $42 million of loans to 5 companies as a result of prepayments and repayments due to acquisitions, the most material being 30 Madison, which closed its acquisition by Remedy meds. As a reminder, 300 Madison was an existing TPVG portfolio company, but also acquired the assets of TPVG portfolio company, PoC, and assumed our outstanding loan. This transaction represents a full recovery, inclusive of end-of-term payments on both transactions.

With regards to our Category 3 or yellow-rated loans, during the quarter, we saw a partial prepay for 1 obligor fair value increases in our loans to link as a result of its recently announced equity raise as well as reductions in the fair value of our loans to Prodigy Finance, a fintech focused on lending to international graduate students due to sector and business performance.

With regards to category 4 or orange rated loans, the most material development is associated with our portfolio company, an EBITDA-positive Swedish women's fashion e-commerce companies. During the quarter, lenders, which includes TPVG and other investment vehicles controlled by our sponsor have recapped and restructured the company and now own a controlling position of the equity of the company.

As part of this process, the lenders reduced the total amount of debt outstanding by converting a portion of the outstanding loans into a hybrid loan instrument, which we now treat as an equity investment on our balance sheet. -- and a small amount into common equity to take the controlling position. As part of our process, we experienced gains as a result of getting full recognition for unaccrued interest end of term payments and fees which was higher than both our cost basis and fair value.

The lenders are working with to evaluate strategic alternatives for the business over the next 12 to 18 months. Our Sol Category 5 or Red Obligor, Fubon continues to work through its recovery process. And here in Q4, we received recoveries of approximately 25% of Q4's fair value. We believe that the resolution on 30 Madison Pill Club and the developments with demonstrate that while some of these credit journeys may take longer than expected, our continued efforts has the potential to work out in our favor.

As of year-end, we held warrants in 118 companies and equity investments in 55 companies with a total fair value of $138 million, up from warrants in 98 companies and equity investments in 48 companies with a fair value of $116 million last year. During the quarter, we did experience a fair amount of volatility in our Warren equity portfolio, resulting in an overall net unrealized loss despite the unrealized gains from our debt investments and a slight reduction in our NAV for the quarter, although NAV is still up $0.12 year-over-year.

These unrealized warrant equity losses were driven from fair value marks on Frategy's preferred equity, which as previously mentioned, was due to performance and sector concerns and write-offs resulting from companies acquired or where our investments expired, offset by unrealized gains from positive results from recent equity rounds by upgrade, file line, flu footage and others.

As we take a step back to assess 2025 in our outlook for 2026, our playbook continues to be focused on building a strong foundation for TPVG and positioning TPVG for the long term by strengthening our balance sheet, driving portfolio scale and quality, rotating the portfolio into newer vintages, resolving credit situation, increasing the earnings power of our business and growing net asset value and shareholder value over the long term.

With that, I will now hand the call over to Mike.

Thank you, Sajal, and good afternoon, everyone. For the full year, we generated net investment income of $42.3 million or $1.05 per share on total investment income -- sorry, on total investment and other income of $90.9 million. Our weighted average annualized portfolio yield on debt investments was 13.7% for the year. compared to 15.7% in the prior year. The decline in yield primarily reflects the lower interest rate environment, including reductions in the prime rate as well as a shift in portfolio mix towards lower-yielding higher-quality borrowers.

During the year, we funded $287 million of new debt investments compared to $135 million in the prior year reflecting the continued strength of our origination platform. We received $212 million of scheduled principal amortization, prepayments and early repayments during the year. resulting in a net increase of approximately $85 million in our debt investment portfolio at cost. As of year-end, our total investment portfolio at fair value totaled approximately $784 million compared to $676 million at December 31, 2024. The representing a 16% increase year-over-year. For the full year 2025, we declared and paid total distributions of $1.08 per share consisting of $1.06 in regular quarterly distributions and a $0.02 supplemental distribution. We ended the year with estimated spillover income of $42.3 million or $1.04 per share, providing meaningful earnings carryover into 2026.

Net asset value increased year-over-year to $8.73 per share at December 31, 2025. Compared to $8.61 per share at December 31, 2024. Over the full year, we recorded a net increase in net assets resulting from operations of $49.2 million or $1.22 per share compared to $32 million or $0.82 per share in the prior year.

Overall, 2025 was characterized by disciplined capital deployment active portfolio repositioning and continued strengthening of our balance sheet. Total investment and other income for the fourth quarter was $22.5 million, representing a weighted average annualized portfolio yield on debt investments of 12.7%. The decrease in yield compared to the prior quarter primarily reflects lower base rates, including reductions in the prime rate.

Approximately 63% of the debt portfolio is floating rate. and 79% of those loans are at their prime rate floors as of December 31, 2025. As a result, we expect the impact of any additional interest rate reductions on our net investment income to be limited, particularly as lower base rates would also reduce interest expense on our floating rate borrowings under the revolving credit facility. This structural positioning continues to serve as an important stabilizing factor in a declining rate environment.

Net investment income for the fourth quarter was $9.9 million or $0.25 per share compared to $10.3 million or $0.26 per share in the prior quarter. Net increase in net assets resulting from operations was $8.1 million or $0.20 per share. During the fourth quarter, the company recognized net realized gains on investments of $4.8 million resulting primarily from the restructuring of an investment in 1 portfolio company. The net change in unrealized losses on investments for the fourth quarter was $6.6 million. consisting of $11.6 million of net unrealized losses on the existing warrant and equity portfolio resulting from fair value adjustments offset by $3.3 million of net unrealized gains on the existing debt investment portfolio from fair value adjustments and $1.7 million of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period. Total operating expenses for the fourth quarter were $12.6 million, net of income incentive fee waivers.

During the quarter, $2 million of income incentive fees were earned but fully waived by the adviser. For the full year, the adviser waived $5.3 million of income incentive fees. In addition, under the total return requirement embedded in our incentive fee structure, income incentive fees were further reduced by approximately $3.1 million earlier in the year.

Collectively, these items increased net investment income by approximately $8.5 million for fiscal year 2025. We -- as previously announced, the adviser amended its waiver in November to waive the quarterly income incentive fee through the end of fiscal year 2026. As of December 31, 2025, a we had total liquidity of $252.4 million, consisting of $47.4 million of cash, cash equivalents and restricted cash and $205 million of available capacity under our revolving credit facility.

We ended the quarter with a gross leverage ratio of 1.33x and a net leverage ratio of 1.20x. We ended the quarter with $260 million of unfunded commitments, down modestly from $264 million in the prior quarter. Of these commitments, approximately $51 million are milestone-based and therefore contingent upon borrowers achieving specified performance targets.

The remaining commitments are well laddered over the next several years with approximately $80 million scheduled to expire in the first half of 2026, $71 million in the second half of 2026, $83 million in 2027 and $27 million in 2028. During the quarter, we successfully extended our revolving credit facility, extending the revolver period to November 30, 2027, and the final maturity to May 30, 2029. We -- the amendment also improved key economic terms, including reduced borrower borrowing spreads and higher advance rates.

On February 27, 2026, the company entered into a note purchase agreement providing for the issuance of $75 million in aggregate principal amount of senior unsecured notes due February 2028 and with a fixed interest rate of 7.5%. On March 2, 2026, we used the net proceeds from this issuance together with borrowings under our revolving credit facility and cash on hand to repay in full the $200 million of unsecured notes that matured March 1, 2026. With the March 2026 maturity fully address, our capital management strategy remains focused on preserving liquidity and financial flexibility while optimizing our overall fixed to floating debt mix and managing our forward maturity profile.

While certain maturities are now more concentrated in late '27 and early 2028 as a result of recent refinancing activity, we are actively managing that profile and expect to address those opportunistically well in advance of their respective due dates, consistent with our disciplined and proactive approach to capital markets execution.

During 2025, our sponsor, TPC purchased approximately 1.8 million shares of our common stock under its discretionary share repurchase program, further demonstrating alignment with shareholders. Following year-end, TPC continued purchasing shares bringing total purchases under the program to approximately 2 million shares or nearly 5% of our outstanding shares. Combined with the extension of the income incentive fee waiver through the end of fiscal year 2026. These actions underscore our continued focus on long-term shareholder value.

In summary, 2025 was a year of stabilization and repositioning. We strengthen overall credit quality, enhanced our capital structure and extended our revolving credit facility on improved terms. With a higher quality portfolio mix -- approximately 79% of our floating rate debt investments already at their prime rate floors and the income incentive fee waiver in place through the end of fiscal 2026 and -- we believe TPVG enters 2026 on solid footing. That concludes our prepared remarks.

Operator, please open the lines for questions.

[Operator Instructions]

And the first question today will come from Finian O'Shea with Wells Fargo Securities.

So the one thing we picked up, as said, two names raised money this quarter to investment names can you remind us like, is that a low number in the historical context? And if so, anything sort of to see there on the macro for venture, if that's kind of just a one-off timing thing?

As I mentioned in my prepared remarks, I think it's a reflection of the freshness of the vintages of our portfolio given the number of new obligors we added both in 2024 and 2025. So we expect the fundraising activity for those names to be more in '26, '27. And so I would say it is a reflection, though, obviously, more of the capital going into AI and related investments overall, as Jim mentioned during his prepared remarks, but I'd say, if anything, just again, a reflection of the rebalancing and rotation of our portfolio into newer vintages.

Okay. No, I appreciate that. And a sort of high level on the sort of long-term goals, as you outlined, I just want to ask if there's any maybe change in the playbook. You've been above book fairly well above book at 1 time, obviously, more generous environment. But today, the sort of starting point is below ground for you. It's a pretty small BDC your cost of capital is pretty high.

It just feels like a pretty long march to be generating an adequate market yield -- so seeing if there's any like if you have -- I appreciate that you could only say so much if there was something, but do you think about change in strategy kind of thing -- or is it sort of same playbook, get back to ideal clean, high-yielding venture debt portfolio?

Well, I would definitely say it's not the same playbook. I think our playbook is refined every year, a reflection of market conditions and strategic initiatives. I would say, yes, obviously, we're disappointed with the performance of TBG from the market cap from a trading perspective, it's not a reflection of our sponsor and our platform and the size and scale of our originations and our capabilities.

But we are very much focused on it, I think demonstrated by our sponsor, the things our sponsor has done, particularly with the share purchase program. But I think more importantly, to your point, Fin, I think, listen, we've been articulating -- it's a multifaceted playbook to get TPVG back to where it should be. It's a combination of, again, building this foundation, positioning for the long term. It's about strengthening the balance sheet and the activities that Mike has done. It's about what Jim and the team are doing about driving new investments in the portfolio scale and rotating into newer vintages. It's what our credit teams are working on and resolving credit situations. It's about improving fundamentally the percentage of income earning assets in the book. And I think shareholders will benefit from that over the long term.

And then I think the wildcard always is the Warner an equity portfolio. And again, Revolut continues to do amazing things. fingers crossed, they continue to -- but we have others. We're not just 1 trick pony. And so I'd say it's a multifaceted strategy. It's a refined strategy, dealing with the realities of the market, market conditions, but also the advisers strategy, experience, Jim and I are now in our 26th year of working together, and we're working hard. So it's not a short fix. It's a long-term playbook, and we appreciate the support and patience from our investors along that journey.

The next question will come from Brian McKenna with Citizens.

Okay. Great. So when you look across the portfolio today, do you think you've worked through most of the negative marks. I'm trying to think through the trajectory of NAV from here, it did increase modestly in 2025. So I'm wondering is this maybe a new trend and if we should expect this to persist moving forward?

I would say that, again, you can never fully have the crystal ball on credit. We continue to work through the situations. There are known situations. I think -- we're pleased that credit has generally been stabilized over the course of 2025. I think the biggest concern is market conditions, macroeconomic impact. And so I would say I'm hesitant to say we're out of the woods, but I would say we are proactive as it can be -- we're resolving situations, and we're making progress, and we'll continue to do so.

All right. That's helpful. And then 2 questions for Mike. -- repayments were clearly elevated in the quarter. You also disclosed that there's been $24 million of prepayments quarter-to-date. But any visibility for the rest of the quarter here in March -- and then my other question there, I mean why not start buying back more of the stock at 60% of book value and maybe do some of that, you use some of the incremental NII from waiving the incentive fees in 2026. Just curious on a couple of those as well.

Yes. I'll take the remaining prepayment and the activity in the quarter. You're correct. We saw an elevated amount of prepayments in the fourth quarter. We saw some prepayments here early on. Currently, not a ton more visibility in prepayments for the remainder of the quarter, but it is something we're monitoring but nothing material to note as far as the remainder of the quarter.

And let's start to add on the share repurchases. These are things we've done before. I can remember at least twice. And remain committed to creating the long-term shareholder value in the near term. The focus these days is a Sajal mention on our investment earnings and enhancing the earnings power and growing the NAV it's maintaining financial flexibility. But absolutely, with that said, management, the Board, we're going to continue to consider all these options, including buybacks to create value for our investors.

The next question will come from Crispin Love with Piper Sandler.

This is Ben Graham in for Kristen Love. Looking at your investment portfolio composition, roughly 27% is made up of software companies. So I'm just wondering if you could maybe drill a little deeper within the cohorts of software where you have exposure and what areas in your portfolio you're most confident in? And then also, which areas you're more cautious on given these AI disruption themes.

Yes. On the software, the way we think of it is that literally last year, we -- TPVG added 28 portfolio companies and 14 of them were software, of which 9 were what I call it, native AI -- the other ones were all tech-enabled AI are absolutely leveraging AI tech forward kind of plays. There's only 5 companies, and these were all ones done pre 2024, it's about $85 million, $89 million or so of exposure. Those ones would be more your general software companies, except each of those in themselves are not the SaaS software kind of makeup type companies.

So the end of the day, in terms of software, the majority of the portfolio of TPVG is deals we've done in the last 2 years. And as I mentioned in the prepared remarks, the overwhelming majority all have or a part of, if not AI native. AI-enabled solutions.

Awesome. And then if I could ask 1 more. I was wondering if you could share your latest views on M&A and IPO activity expectations for 2026. And if these expectations have changed again given these market reactions to AI disruption impacts to public software as well as other sectors?

Yes. I would definitely say, given the developments of the last week or so, Obviously, there's a significant amount of volatility in the market. And so I would say any overall optimism we had about the IPO markets probably is delayed. I wouldn't say closed, but I'd say delayed -- with regards to IPO activity, as Jim mentioned in his prepared remarks, I mean, we have a number of portfolio companies that are preparing and hope to be part of the next class is IPO activity.

I think we are pleased, though, we are seeing M&A discussions pick up. Now it's to be determined valuations and multiples and seeing those transactions actually close. But as folks remember in prior years, we saw in lack of M&A activity. And I think we're pleased to see that activity pick up and cautiously optimistic that in -- even if the IPO markets don't open up, that the M&A markets will continue to be opportunistic and open for those unique opportunities or compelling opportunities.

The next question will come from Christopher Nolan with Ladenburg Thalmann.

A recent discussion I had with indicated that some of the concern around software is not so much their near-term cash flow. It's the terminal value. for these companies thinking that AI is just going to cut the legs out from under them over time. If that's the case and given that you guys have a significant exposure to software, does this affect how you evaluate software companies? And if so, is there a risk of meaningful markdowns in your equity portfolio?

Yes. Chris, let me pass through that in a couple of nuances. So I'd say as Jim first talked about, the majority of our "software companies there the class of '24, the class of '25, and the majority of them are AI-enabled. So we -- there is no the codes we use don't have the AI categories yet.

So we define those as fundamentally AI or AI-enabled companies as we look to more fundamentally to the other companies that are not in those vintages as Jim was saying, they're so entrenched with their customers that the ability for a company to replace them is particularly challenging, which makes them incumbent, which again, I think it's important because now let's add the part of the venture lending aspect, so 3-year loans.

So this is where cash paying loans. And so this is where we add in the fact the uniqueness of our business that these are short-term financings that these are transactions that are not -- our exit is not predicated on a sponsor selling the company or the company getting acquired. It's fundamentally on companies either ability to raise another round of financing or cash flow from the business to service our debt. that's what gives us comfort.

So fundamentally, that's the benefit of venture lending to software companies or SaaS companies or AI companies versus more traditional middle market lending.

Are you guys think in general that AI is a real product now? Or is it something in the product pipeline of these companies that's going to hit.

No, no, it's a real product. It's.

It's all debt. Yes. I would say it's not a sector. It's absolutely horizontal across everything. The way I think of it is everything these days is AI Topia, AI euphoria -- and to your question, we're not looking and really don't look at software-only plays, on-prem software, anything like that. It's all AI-enabled software across the board.

Great. And I guess a final question on this, as you guys see a lot of AI out there. Is there any way that this could come into your own operations to start improving your operating leverage on your earnings?

Well, we're already using AI actively software, including some of our portfolio companies AI in our due diligence processes and other aspects and parts of our business. So that's absolutely something and we're actually using it as well. when we're looking at AI opportunities themselves and actually have some AI software companies, which actually their business is evaluating other AI companies identity and other issues. But Mike, I don't know if you want to add.

Yes, I was going to add just from an operations back of the house, middle of the house standpoint we've been starting to deploy AI in the back half of 2025 and going to continue that in 2026, rolling it out to all associates and really asking them to -- rather than us tell them how to use the AI, look for them to find ways to make their more efficient -- their jobs more efficient we're definitely seeing some efficient already, and I expect to see that more in 2026 and 2027 for sure.

Okay. Is it something to quantify as you go along, like provide some guidance, it would be helpful if we can get this efficiency ratio improved.

From my standpoint, it would be a headcount standpoint as far as whether it's the accounting and finance division or the operations division, -- so I'm not sure that's something we would be disclosing to you all as far as our headcount within the back of the office, but something we can talk about further.

The next question will come from Finian O'Shea with Wells Fargo.

Just seeing if you could tell us the OID on the post-quarter bonds.

Yes. When you say OID, are you talking about the discount. Yes, there is no. It's 7.5%. That's right. Yes. We did not issue it at a premium or a discount. Sorry, I didn't quite understand the question. But yes, the $75 million was issued and proceeds were at face value.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jim Labe for any closing remarks. Please go ahead.

As always, I'd like to thank everyone for listening and participating in today's call. We look forward to updating and talking with you all again very next quarter. Thanks again, and have a nice day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, ladies and gentlemen. Welcome to the TriplePoint Venture Growth BDC Corp. Third Quarter 2025 Earnings Conference Call.

[Operator Instructions]

This conference is being recorded, and a replay of the call will be available in an audio webcast on the TriplePoint Venture Growth website.

Company management is pleased to share with you the company's results for the third quarter of 2025. Today, representing the company is Jim Labe, Chief Executive Officer and Chairman of the Board; Sajal Srivastava, President and Chief Investment Officer; and Mike Wilhelms, Chief Financial Officer.

Before I turn the call over to Mr. Labe, I'd like to direct your attention to the customary safe harbor disclosure in the company's press release regarding forward-looking statements and remind you that during this call, management will make certain statements that relate to future events or the company's future performance or financial conditions, which are considered forward-looking statements under federal securities law.

You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements.

The company does not undertake any obligation to update any forward-looking statements or projections unless required by law.

Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflect management's opinions only as of today. To obtain copies of our latest SEC filings, please visit the company's website at www.tpvg.com. Now I'd like to turn the conference over to Mr. Labe.

Thank you, operator. Good afternoon, everyone, and welcome to TPVG's third quarter earnings call. During the third quarter, our focus remained on furthering our strategy to increase TPVG's scale, durability, income-generating assets and NAV over the long term.

We're pleased with the progress we have made in the quarter working towards these important objectives, and we expect fundings to continue to materialize over the next few quarters as we progress on our path of portfolio diversification and investment sector rotation.

In addition to covering the dividend for the quarter and increasing our NAV, the third quarter marked one of growth and increased investment activity for TPVG.

We took advantage of strong demand from high-quality venture growth stage companies in the sectors we are focused on to grow the debt investment portfolio. During the quarter, TPVG experienced its highest level of debt commitments and fundings since 2022, resulting in Q3 fundings that significantly exceeded our guided range, reaching the highest level in 11 quarters.

Importantly, Q3 also represented the highest level of signed term sheets with venture growth stage companies at our sponsor, TriplePoint Capital. Looking at the last 3 quarters alone, signed term sheets for venture growth stage companies at TPC reached almost $1 billion.

At quarter's end, our pipeline also continued to remain at near record highs since 2021. Touching on the overall venture capital market, while some uncertainties and volatility certainly still remain. Investment activity is rising and venture capital deal activity increased during the quarter due primarily to all this momentum going on in the AI space.

According to PitchBook, AI investments accounted for more than 2/3 of the venture deal value last quarter. For mega deals was more than 70% of the deal value, a level not seen since 2021 and 2022. Another encouraging sign were increases in M&A and IPO activity, which collectively generated more than $75 billion across 362 exits, the strongest quarter for venture-backed companies since the pandemic.

Turning to our own internal tracking. The number of equity rounds closed by our select venture capital investors year-to-date has already exceeded the aggregate total for all of last year by 34%. All these trends hold promise for what we believe are signs for continuing improvement for the venture markets versus those upheavals in the last half of 2021 and right through late 2022.

We're also seeing a notable decrease in equity financing down rounds and an increase in up rounds. These days, more and more, I hear the word uptick in conversations in venture circles, and certain companies, in fact, are experiencing oversubscribed equity rounds, and there's an active secondary market, which has come back for some companies as well, including a few of our portfolio companies. There's growing optimism that venture companies are beginning to find some path to liquidity and should IPO and M&A markets for venture companies continue on this improvement, it represents additional opportunities.

One of the potential benefits of our venture lending business that's often overlooked are the warrants we receive as part of our loan transactions and our equity investments.

We have a sizable equity and warrant portfolio with warrant positions in 112 portfolio companies and equity investments in 53.

As the exit market continues to evolve, we're well positioned to realize value for shareholders. We hold positions in a number of companies, which has also appeared in industry publications on their notable top IPO candidates list, companies such as Cohesity, Zev, Revolut, Dialpad, Filevine and others.

While we're encouraged by market and portfolio developments, we remain highly focused on monitoring and working through credit situations, primarily investments from the pre-market change period, and Sajal will discuss those more in detail later in this call.

Taking a closer look at the portfolio, we're pleased to report continued progress on diversification as we made commitments to 9 new borrowers during the quarter and now 19 new borrowers year-to-date.

As part of the diversification, we've also been leaning into increased companies characterized by substantial revenues, strong margins, solid cash runways at or near EBITDA positive and with a clear path to cash flow generation and debt service without the need for further equity fundraising.

They're generally more mature companies. They have stronger profiles, and we're the senior lender often with revolving loans with the trade-off being lower yields given their more mature profile.

Turning to investment sector rotation. We continue to actively add new borrowers focused on high potential and durable sectors, especially those that are able to leverage AI to drive product differentiation, market disruption and efficiency. We remain excited by the horizontal market opportunity AI presents, and we believe it will be a massive megatrend that persists for many years to come.

Similar to our select venture capital investors, AI is a clear center of gravity. The technology combines massive growth potential with equally large capital requirements, particularly around GPUs, data center infrastructure and unique models trained on proprietary data.

These dynamics play directly to the strengths and advantages of our venture lending, providing non-dilutive growth capital to high-growth companies in capital-intensive markets.

Over the past 2 years, we've been active in lending across the full AI stack from semiconductor companies enabling AI inference like Etched to networking infrastructure companies to power the next generation of AI data centers like Eridu.

All these companies are experiencing market tailwinds and thriving in the new era of AI. Given the significant interest in AI, however, a key for us is to be disciplined in our underwriting. In AI, our focus is on whether the company's technology translates into durable, defensible value. That means real differentiation in data or model performance, early proof of enterprise adoption and strong gross margins after infrastructure costs.

We believe the companies that will win tend to build leverage over time. Their models are going to be getting smarter, their integration is stickier and their cost of incremental insight goes down, not up. Outside of AI, the path continues to pursue selectivity, diversification and investment sector rotation, and we continue to make great strides. We're actively investing in attractive fields outside of just AI, verticalized software, fintech, aerospace and defense, robotics, cybersecurity and health tech, among others.

As we seek to capitalize on these compelling opportunities and grow and diversify the portfolio. we continue to do so with an emphasis on U.S. companies, companies that are better capitalized and have visibility to profitability as well as business models reflective of today's market conditions and the valuations.

We continue to focus on companies that have recently raised capital, have ample cash runways and have backing from one or more of our select venture investors.

In summary, Q3 represented a quarter of progress for us as we seek to increase TPVG's scale, durability, income-generating assets and NAV over the long term. Importantly, we are positioning TPVG for the future to create shareholder value with the strong support of our sponsor, TPC.

As we mentioned in our last quarter, as of this call, our sponsor announced a discretionary share purchase program and further demonstrating alignment with TPVG shareholders, our adviser amended its existing income incentive fee waiver to waive in full its quarterly income incentive for each quarter in 2026.

Later on the call, Mike will provide an update on these topics. With that, let me turn the call over to Sajal.

Thank you, Jim, and good afternoon. Regarding investment portfolio activity during Q3, TriplePoint Capital signed $421 million of term sheets with venture growth stage companies compared to $93 million of term sheets in Q3 2024 and $242 million in Q2.

On a year-to-date basis, TPC has signed $978 million of term sheets versus $412 million over the same period in 2024. With regards to new investment allocation to TPVG during the third quarter, our adviser allocated $182 million in new commitments with 12 companies to TPVG, compared to $51 million in Q3 2024 and $160 million in Q2 2025.

75% of the portfolio companies we extended commitments to during the quarter were new customers, 90% of which are in the AI, enterprise software and semiconductor sectors, reflecting our focus on obligor diversification and sector rotation.

On a year-to-date basis, we have closed $418 million to 19 new portfolio companies and 6 existing portfolio companies as compared to $103 million to 5 new portfolio companies and 4 existing portfolio companies over the same period in 2024.

Of our 49 obligors with outstanding loans as of [ 9/30 ], 4 were added to the portfolio in 2023, 6 were added in 2024 and 11 were added here in 2025. So progress on our plans for obligor, vintage and sector rotation. As Mike will cover, our outstanding unfunded obligations include 10 new customers, which have yet to utilize their commitments and should add to our customer count and rebalancing efforts. During the third quarter, in anticipation of prepayment and scheduled repayment activity in Q4, we exceeded our guided range and funded $88 million in debt investments to 10 companies as compared to $33 million to 4 companies in Q3 2024 and $79 million to 9 companies in Q2 2025.

These funded investments carried a weighted average annualized portfolio yield of 11.5%, down from 12.3% in Q3 -- sorry, Q2 and 13.3% in Q1. The lower overall onboarding yields in Q3 reflect a number of factors, including a higher percentage of revolving loans, enabling us to be the sole lender to our portfolio companies, more robust enterprises from a size and scale perspective, including EBITDA positive borrowers, intentionally driving higher utilization of unfunded commitments at closing given substantial borrower cash cushion levels, lower OID as a result of reduced enterprise valuations as well as the declining rate environment.

On a year-to-date basis, we have funded $194 million to 22 companies at a weighted average yield of 12.1% as compared to funding $85 million to 10 companies at a weighted average yield of 14.5% over the same period in 2024.

During Q3, we had $15 million of loan repayments, resulting in an overall weighted average debt portfolio yield of 13.2%. Excluding prepayments, our core portfolio yield was 12.8%, which was down from 13.6% in Q2, reflecting the impact of lower yields from new assets we are onboarding as discussed earlier.

On a year-to-date basis, we have had $76 million of loan prepayments as compared to $118 million of prepayments over the same period in 2024. As I will discuss in more detail shortly after quarter's end, we received principal repayments totaling $47.5 million so far in Q4.

During the quarter, our debt investment portfolio grew by over $73 million as a result of new fundings exceeding prepayment, repayment and amortization within the portfolio.

This is the third consecutive quarter we've increased our debt investment portfolio on a cost basis, representing nearly $110 million of growth year-to-date as compared to $127 million of portfolio reduction last year.

Although we continue to see robust demand for debt financing from venture growth stage companies as demonstrated by $123 million of new term sheets, $17 million of new commitments and $18 million of funding so far in Q4, our quarterly target for new fundings continues to be in the $25 million to $50 million range for Q4 2025 and early 2026 as we manage liquidity going into our debt financing process.

During the quarter, 4 portfolio companies with debt outstanding raised $50 million of capital, compared to 5 portfolio companies with debt outstanding raising $216 million during the second quarter.

We believe Q3 numbers were lower primarily due to timing and expect robust activity here in Q4. On a year-to-date basis, 13 portfolio companies with debt outstanding have raised compared to $402 million of capital last year.

As of quarter end, we held warrants in 112 companies and equity investments in 53 companies with a total fair value of $134 million, up from $127 million in Q2, primarily related to a markup in our equity holdings in GrubMarket due to strong performance and improving market multiples.

During Q3, one portfolio company with a principal balance of $29.8 million was upgraded from White to Clear. One portfolio company with a principal balance of $2.1 million was upgraded from Yellow to White. One portfolio company, Prodigy Finance, a fintech focused on international graduate students with a principal balance of $40.8 million was downgraded from White to Yellow and one portfolio company, Frubana, with a principal balance of $11.1 million was downgraded to Red and moved to nonaccrual as we finalize our recovery process.

We did actually see slight improvement in our expected recovery from Q2's mark on Frubana despite the downgrade.

During the quarter, we saw a $2.5 million increase in the fair value of our loans in Orange-rated portfolio company, Roli, which in addition to winning Time Magazine's Innovation of the Year award for the third time, held the first close of a new equity round from its existing investors as well as hold the signed term sheet from additional investors to participate.

As I mentioned earlier, we experienced a $5.7 million unrealized gain on our equity investment in GrubMarket as a result of performance.

As a reminder, GrubMarket acquired the assets of our portfolio company, Good Eggs, in Q3 2024, and we received this equity for consideration of our then outstanding loans.

Although we took a $4.6 million realized loss on our $12 million loan at the time of the transaction, this gain reduces that loss in its entirety on an unrealized basis and reflects well in our team's recovery efforts on the Good Eggs transaction.

As I mentioned earlier, here in Q4, we received $47.5 million of prepayments, mostly from 2 portfolio companies, Thirty Madison and Moda Operand. Thirty Madison announced its acquisition by RemedyMeds in Q3. And as part of the transaction, nearly $30 million of our outstanding position has been paid down in Q4 with our remaining $20 million exposure amortizing over the next 3 months.

As a reminder, Thirty Madison was an existing TPVG portfolio company, but also acquired the assets of TPVG portfolio company Pill Club and assumed our outstanding loans of $20 million in full. This transaction represents a full recovery, including end of term payments on both transactions.

But as a reminder, both were quite seasoned loans, so very little incremental contribution to income here in Q4. We also anticipate Thirty Madison to be upgraded to Clear rating here in Q4.

We also experienced a $15.7 million paydown on our loans to Moda Operandi here in Q4, a Yellow-rated asset as a result of the company raising incremental equity and debt financing and our remaining loans of $10 million have had their maturity dates extended. And should Moda continue to perform well, we would anticipate the company to be upgraded to White over time.

While some of these journeys may take longer than expected, these developments demonstrate why our team continues to dedicate time and effort on the recovery journey and also that we are building some momentum with regards to some of our historical names.

In closing, we remain aligned with our stakeholders, disciplined in our underwriting and mindful of the volatile market environment as we execute on our plan for positioning TPVG for the long term.

We continue to target well-positioned and well-capitalized new customers in attractive sectors to drive investment fundings and earnings power to build shareholder value. With that, I'll now turn the call over to Mike.

Thank you, Sajal, and good afternoon, everyone. During the third quarter, we funded $88 million of new debt investments, up from $79 million last quarter, reflecting the continued expansion of our investment pipeline and conversion of signed term sheets into closed commitments.

We received $15 million of prepayments and early repayments during the quarter, driving a net increase of approximately $73 million in our debt investment portfolio at cost, which now totals $737 million at quarter end as compared to $627 million at December 31, 2024, a 17% increase.

As of September 30, 2025, the company had total liquidity of $234 million, consisting of $29 million of cash and cash equivalents and $205 million of available capacity under our Revolving Credit Facility. Of the $205 million of available capacity under the Revolving Credit Facility, there was $53 million of available borrowing base that could be drawn on as of September 30, 2025. We ended the quarter with a leverage ratio of 1.32x and a net leverage ratio of 1.24x, both well within our target range and reflecting increased deployment of capital to fund the debt portfolio.

Subsequent to quarter end, the company has already received $48 million of principal payments -- prepayments, providing additional liquidity to support new fundings and positioning the company well for the upcoming $200 million note maturity in the first quarter of 2026.

We ended the quarter with $264 million of unfunded commitments, up from $185 million last quarter. Of these unfunded commitments, approximately $60 million are milestone-based. The commitments are well laddered over the next several years with $14 million expiring in Q4 2025, $152 million in 2026, $71 million in 2027 and the final $27 million in 2028.

Turning to our operating results. Total investment income for the third quarter was $22.7 million with a weighted average portfolio yield of 13.2%, compared to 14.5% in the prior quarter.

The decrease in yield primarily reflects a lower level of prepayment income, lower yields on our debt investment portfolio in part due to decreases in the prime rate and a slightly larger mix of lower-yielding recently originated loans reflective of the market and borrower characteristics.

66% of our debt portfolio is floating rate and 46% of those floating rate loans were at their floors as of September 30. Following the 25 basis point Fed rate cut in late October 2025, floating rate loans at their rate floors increased to 52%. As a result, we expect the impact of any further interest rate reductions on our net investment income to be limited, particularly as lower base rates would also reduce interest expense on our floating rate revolving debt.

Total operating expenses for the quarter were $12.3 million, consisting of $6.8 million from interest expense, $3.4 million of base management fees, $0.6 million of administrative expenses and $1.6 million of G&A expenses. In the current quarter, $2.1 million of income incentive fees were earned but fully waived by the adviser.

Year-to-date, the adviser has waived $3.3 million of income incentive fees. In addition, under the shareholder-friendly total return requirement, income incentive fees were further reduced by $3.1 million earlier this year.

Together, these actions have increased net investment income by approximately $6.5 million year-to-date.

As a result of the continued fee waivers mentioned by Jim earlier, we do not expect to incur any income incentive fee expense for the fourth quarter of 2025 or for all of 2026.

Net investment, net investment income for the quarter was $10.3 million or $0.26 per share, compared to $11.3 million or $0.28 per share in the prior quarter.

Our net increase in net assets resulting from operations was $15.2 million or $0.38 per share, which included $0.13 per share of net realized and unrealized gains, primarily from unrealized gains on debt and equity positions.

These gains were partially offset by a small unrealized foreign currency loss of $0.5 million or $0.01 per share. At quarter end, net asset value increased to $355.1 million or $8.79 per share, up from $8.65 at June 30.

Now turning to our capital structure. As of quarter end, total debt outstanding was $470 million, consisting of $375 million of fixed rate term notes and $95 million drawn on our $300 million floating rate Revolving Credit Facility.

Our term notes carry maturities in March 2026, February 2027 and February 2028, all at fixed rates. With our 2026 maturity approaching, our capital management strategy remains focused on maintaining liquidity and flexibility while optimizing our fixed to floating debt mix. We expect to refinance the $200 million March 2026 notes with a combination of new fixed rate unsecured notes and available revolver capacity during the first quarter of 2026. We are in the final stages of renewing our $300 million revolving credit facility, which matures at the end of this month. While the renewal amendment has not yet been executed, the preliminary terms outlined to date are constructive and favorable for the company.

We expect the renewal to support our growth trajectory and align with our long-term capital plan. Regarding distributions, on October 14, our Board declared a regular quarterly distribution of $0.23 per share and a supplemental distribution of $0.02 per share, payable on December 31 to shareholders of record as of December 16.

The supplemental distribution was declared in order to enable the company to distribute all of the company's remaining undistributed taxable income from the prior year. As of September 30, we had estimated spillover income of $43.4 million or $1.07 per share. As a reminder, we announced during our August call that our sponsor, TriplePoint Capital, launched a $14 million share repurchase program to buy TPVG stock below NAV.

Through quarter end, TPC purchased about 591,000 shares for roughly $3.9 million, leaving about $10 million available under the program. TPC plans to adopt a 10b5-1 plan once the trading window reopens, which will allow purchases to continue automatically after the 30-day cooling off period.

The program continues to demonstrate our sponsors' confidence and alignment with shareholders. Looking ahead, our priorities remain consistent. We will continue to focus on sector rotation in our debt portfolio, maintaining credit quality and preserving balance sheet flexibility as we prepare for the refinancing of our 2026 notes.

With robust sponsor support and a growing investment pipeline at the platform level, TPVG remains well positioned to generate long-term shareholder value. That concludes my prepared remarks. Operator, please open the line for questions.

[Operator Instructions]

And your first question today will come from Crispin Love with Piper Sandler.

First, can you just discuss what you need to see in order to increase your funding guide? The last couple of quarters have been very active. I believe you mentioned early on that you expect fundings to remain solid. Is the key driver there, leverage and liquidity holding you back or other factors at play? I guess I'm asking it's more internal factors rather than external as you look at it?

Crispin, this is Sajal. So I would say, obviously, quality of opportunity and credit quality selectivity drives number one. But I would say, absolutely, we're very much focused on the upcoming refinancing of our debt.

And so we're mindful of liquidity and leverage ratios going into that for the time being. And then coming out of that, we'll, again, adjust and act accordingly.

Great. That all makes sense. And then just on credit quality, metrics in the quarter, mostly stable, slight uptick in nonaccruals on a dollar basis. But can you discuss what you're seeing in credit in your portfolio and then broadly in the venture lending space?

And then has your credit underwriting changed at all recently? You mentioned more revolving loans. I believe you said larger enterprises. So just curious if there's any changes there.

Yes. Let me start with maybe overall credit. So I would say credit performance, I would say, listen, this was a good quarter in terms of demonstrating kind of the adviser and the platform's kind of credit workout and recovery process and our commitment to resolving situations.

We understand some situations may take longer than others. But with the developments with GrubMarket and Thirty Madison in particular, again, demonstrating the hard work that goes into these things and the patience and commitment and getting kind of positive outcomes in those situations. Obviously, Roli has been a long journey. We have some positive developments here this quarter. So we're comfortable. We're happy about that. As we alluded to with some of the other names, we're expecting upgrades here in Q4.

I think as Jim talked to, I mean, a key element is the improvement in the equity markets and the fundraising activity is number one. I think the second thing is obviously performance by our portfolio companies. But mind you, we have to be balanced. It's all very sector-specific as well. So we're balancing overall positive trends in the venture equity markets with sector-specific challenges and company-specific challenges.

But I would say we're pleased with the team's effort here in the quarter. With regards to the overall venture segment, I can't -- I can only speak to the tech world and the Tier 1 VC world where we operate. And again, we're continuing to see strong demand. We're continuing to see strong performance.

And so we're very much focused on that. As we look to overall originations focus, I think as Jim talked to, very much we're avoiding the frothiness that we're seeing in certain sectors and areas and really leaning in on our core strengths, working with the best venture capital funds, the best entrepreneurs and seeing where we can be helpful and collaborative with their portfolio companies and then taking advantage of opportunities where we can earn additional return for lower risk, be it in a revolving loan or lending to an EBITDA positive company with a stronger yield profile that we normally target.

And your next question today will come from Doug Harter with UBS.

This is Cory Johnson on for Doug Harter. Last quarter, you were able to give some guidance in terms of about the number of repayments you expected for each quarter for the upcoming quarters.

Has your view -- as the market seems to possibly be heating up, has your view on the pace of prepayments possibly changed? And do you have any line of sight into any upcoming repayments or realization?

Hi Cory, it's Sajal. I'll take this first. So I would say our guidance continues to be to expect prepayment a quarter for 2026, just based on market conditions. But more importantly, given the amount of prepay activity that we've seen over the past 2 years and the newer vintages we're putting in place, we would expect that pace to generally slow down.

And so that's why we're guiding to 1 on average per quarter. As we mentioned in our filings, here in Q4, we've had a little more than 1 in terms -- and these were more unique situations, Thirty Madison and Moda and another portfolio company, so I'd say Q4 was an exception. But generally, we continue to expect one a quarter.

But again, those loans that will be prepaying will be our more seasoned loans. So we're not expecting significant or material excess income from an NII perspective.

The next question will come from Christopher Nolan with Ladenburg Thalmann.

On the debt refinance, as I recall, this $200 million note is investment grade. Is that correct?

Yes, it is.

Yes. And also as I recall, that to be index eligible for investment grade, the debt amount, I believe, has to be, what, $200 million or so and above. Is that correct?

That's one of the factors. Yes, it is.

And so Yes, I guess my basic question is, if you're using a combination of new notes and the bank facility, is it fair to say that the new notes that you're going to be issuing will not be investment-grade index eligible. Is that correct?

No, that's not. We're expecting to issue roughly $100 million to $125 million. That number is to be finalized, but we're expecting that to be investment grade.

But not index eligible, which I believe impacts the rate -- the coupon rate a little bit, doesn't it?

Correct. So again, given the quantum and given where rates are, we don't think having a significant -- that large of long-term fixed rate debt in this environment makes sense given, again, the prepayment activity that we experienced and wanting to have the ability to use our revolver to pay down as we have prepays.

And I guess on a related question is where do you see the leverage ratio going? From your -- from Jim's comments, it sort of -- and Sajal's comments, it sort of indicates that the portfolio is going to grow in the fourth quarter.

We're actually not expecting -- given the prepayment activity that we're seeing in the fourth quarter, we're expecting little to no growth.

Our guidance from a leverage standpoint is 1.3 to 1.4. As you know, Chris, we came in at 1.32. I think we'll come in right about that level at the end of December as well. Our guidance is 1.3 to 1.4.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jim Labe for any closing remarks. Please go ahead.

Thank you. As always, I'd like to thank everyone for listening and participating in today's call. We look forward to updating and talking with you all again next quarter. Thanks, and have a nice day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.