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Dec 31, 2024
Oaktree Q1 2025 Earnings Report
Financial results announced for the fiscal quarter ended December 31, 2024.
Key Takeaways
Oaktree Specialty Lending Corporation reported a GAAP net investment income of $44.3 million ($0.54 per share) for the first fiscal quarter of 2025, compared to $44.9 million ($0.55 per share) for the fourth fiscal quarter of 2024. Total investment income was $86.6 million ($1.05 per share) for the first fiscal quarter of 2025, as compared with $94.7 million ($1.15 per share) for the fourth fiscal quarter of 2024.
Oaktree Capital I, L.P. purchased $100.0 million of shares of OCSL common stock at the Company’s net asset value as of January 31, 2025.
A total return hurdle was implemented, resulting in waived Part I incentive fees of $6.4 million for the quarter ended December 31, 2024.
Originated $198.1 million of new investment commitments and received $352.4 million of proceeds from prepayments, exits, other paydowns and sales during the quarter ended December 31, 2024.
A quarterly and supplemental cash distribution was declared of $0.40 per share and $0.07 per share, respectively, payable in cash on March 31, 2025.
Oaktree
Oaktree
Oaktree Revenue by Segment
Revenue by Segment
Interest Income Revenue
CapyFin.comPIK Interest Income Revenue
CapyFin.comFee Income Revenue
CapyFin.comDividend Income Revenue
CapyFin.com Forward Guidance
Oaktree is focused on underperforming borrowers and identifying appropriate courses of action. They remain committed to shareholders and growing the business, as demonstrated by Oaktree's $100 million share purchase at NAV and the institution of a cap in the calculation of the Part I Incentive Fee.
Positive Outlook
- Continued focus on working through underperforming borrowers to identify appropriate actions.
- Demonstrated commitment to shareholders through Oaktree's $100 million share purchase at NAV.
- Incentive fee cap instituted to consider capital gains and losses, building to a 12-quarter lookback by fiscal year-end 2027.
- Actions taken to provide capital for executing long-term initiatives.
- Modification to the dividend policy introduces a stable base dividend, which is anticipated to be sustainable across market cycles, amid fluctuations in rates and spreads.
Challenges Ahead
- Continued challenges with several portfolio companies.
- Decline in adjusted total investment income primarily due to decreases in reference rates, the impact of certain investments that were placed on non-accrual status, a smaller investment portfolio, and lower OID acceleration from investment repayments.
- Decrease in fee income driven by lower prepayment fees.
- Reduction in dividend income from the Company’s investment in Senior Loan Fund JV I, LLC (“SLF JV I”).
- Adjusted net realized and unrealized losses, net of taxes, were $37.1 million, primarily reflecting realized and unrealized losses on certain debt and equity investments.