Goldman Sachs BDC, Inc. Q4 FY2025 earnings call

• GSBD has enhanced sourcing, underwriting, and portfolio management oversight since integration in 2022. The proportion of the portfolio benefiting from the 2022 reorganization grew to 57% in the quarter. - Median EBITDA of the portfolio increased 84% from 2021 to 2025, and first lien exposure increased. PIK as a percentage of investment income decreased, and nonaccrual investments were lower. ARR loan exposure within GSBD was reduced. - In 2025, the direct lending platform in Americas committed $14.6 billion, up from $13 billion in 2024. - Have an experienced software investing team, passed on a deal due to AI concerns in 2023, rolled out an internal AI disruption risk framework in 2025. - Clearwater Analytics deal exemplified leveraging Goldman Sachs ecosystem for origination and diligence. - In fourth quarter, net investment income per share was $0.37, net asset value per share was $12.64. Declared a fourth quarter 2025 supplemental dividend and a first quarter 2026 base dividend. Ended quarter with net debt-to-equity ratio of 1.27x. - Portfolio had 171 portfolio companies across 40 industries. Weighted average yield of total debt and income - producing investments at amortized cost decreased. Portfolio companies had top line and EBITDA growth. Weighted average net debt-to-EBITDA increased slightly, while interest coverage increased. Sales and repayment activity totaled $251.6 million during the quarter, with over 78% of repayments from pre-2022 vintage loans. Utilized 10b5 - 1 stock repurchase plan, repurchased shares. - Ended fourth quarter with total portfolio investments at fair value of $3.3 billion, outstanding debt of $1.9 billion, and net assets of $1.4 billion. Had borrowing capacity remaining under revolving credit facility, borrowed and issued notes subsequently.

As of December 31, 2025, total investments in the portfolio were $3.26 billion at fair value, comprised of 38.4% in senior secured loans, 1.3% in a combination of preferred and common stock and a negligible amount of warrants. The median EBITDA of the portfolio increased 84% from year-end 2021 to $71.8 million at year-end 2025. Exposure to first lien investments increased to 97% of the portfolio from 89% during 2021 - 2025. PIK as a percentage of total investment income was 9% in Q4 2025, down from 15.3% in Q4 2024. Investments on nonaccrual decreased slightly to 1.9% of fair value from 2% during the year. ARR loans within GSBD came down from nearly 39% of the portfolio on a fair value basis to 11% during the period. GSBD committed approximately $1.2 billion in new commitments throughout 2025 in 35 new deals, with GS playing a lead role in approximately 75% of the deals. During the quarter, new commitments of approximately $394.9 million across 27 portfolio companies were made, 100% of which were in first lien loans.

• David Miller felt pretty good about the dividend as it sits today, somewhat optimistic about spread widening seeing 25 - 50 basis points in coupon and OID. - Stanley Matuszewski mentioned the net debt-to-equity ratio was a limiting factor in share repurchases, and they will continue to assess the ability to utilize the stock repurchase program in the future, still having room within the $75 million authorization.

• Concerns regarding AI's potential impact on certain software business models, although as credit investors focused on top of capital structure, there is some insulation, but sufficiently severe disruption could impact creditworthiness. - Risk that net debt-to-equity ratio could limit share repurchase program utilization. - Potential headwinds and AI disruption risk within industries could lead to proactive exits of companies, as seen with the software provider for the staffing, recruitment, and contingent labor industry.

Q: Finian O'Shea asked about Clearwater and semi-liquids.

A: Vivek Bantwal said Clearwater was an example of benefiting from being connected to the #1 M&A investment bank, and on semi-liquids, explained the process, liquidity provisions, and importance of educating investors on trade-offs.

Q: Finian O'Shea asked about dividend.

A: David Miller said they felt good about the dividend, somewhat optimistic about spread widening.

Q: Heli Sheth asked about spillover and deployment of spillover.

A: Stanley Matuszewski said spillover had come down, no current plans for special distribution but could distribute incremental NII.

Q: Heli Sheth asked about shift in deal mix.

A: Vivek Bantwal said composition of deal flow wasn't changing much, but M&A activity was picking up in other industries.

Q: Ethan Kaye asked about AI framework and share repurchases.

A: David Miller said majority of software portfolio stacks up well, some legacy assets would not have passed AI framework and were being managed, Stanley Matuszewski said net debt-to-equity ratio was a limiting factor in share repurchases and they would assess future utilization of repurchase program