Blue Owl Technology Finance Corp. Q4 FY2025 earnings call

• Performance at OTF has been strong, with a successful public listing on the NYSE in June 2025, being the largest publicly traded technology-focused BDC by total assets. Declared 5 quarterly special dividends of $0.05 per share through September 2026 in addition to regular $0.35 per share dividend. • Worked through lockup releases, with roughly 50% of shares freely tradable, and repurchased $65 million of OTF shares during the fourth quarter at an average price to book value of 0.82x. • Software borrowers are delivering low to mid-teens revenue and EBITDA growth. Have a dedicated team of over 40 technology investment professionals across 10 key subsectors. • In the fourth quarter, deployed $2.3 billion of new investment commitments, including $2 billion of new investment fundings, with repayments at $881 million. Has a backlog of approximately $900 million in transactions expected to fund next quarter.

Software comprises approximately 70% of the portfolio. The balance includes tech-enabled services, other technology sectors, life sciences, and a small portion of non-technology investments. In the fourth quarter, OTF delivered a nearly 11% return on adjusted net income. NAV increased 35 basis points in the quarter and is up nearly 16% since inception. The portfolio has low levels of nonaccruals and has posted average annual net gains of 23 basis points since inception.

• Remains encouraged by the quality and momentum of near-term pipeline, supporting disciplined portfolio growth through 2026. • Earnings trajectory is positioned differently than many BDC peers, with $0.35 base dividend set in early 2025 calibrated for lower rate environment, not expecting to adjust base dividend simply due to rate changes. • Pro forma leverage based on anticipated fundings and visible repayments would bring to bottom end of target leverage range slightly ahead of expectations at listing.

• Rapid technological change like AI creates disruption and uncertainty. • Public debate and equity market volatility around who wins growth, captures upside, and valuations reset. • Some lenders may pull back, creating supply-demand imbalances, but also potential for better pricing and structure when opportunities emerge.

Q: Looking at the portfolio, how are you making sure you're investing into the right businesses in the current backdrop and any subsectors to lean into?

A: Tried to lay out framework on software universe, believes companies with real moat will leverage AI tools.

Q: Trajectory of ROEs?

A: On track, some deployment back-ended, momentum should pick up across 2026.

Q: New share repurchase program?

A: Upsized to $300 million, plan to continue using, saw activity in fourth quarter.

Q: Spreads on new investments?

A: Spreads have been tight, expect widening in software universe but still see attractive opportunities.

Q: $900 million backlog, component of software?

A: Pretty comparable mix in software mix between applications and security opportunities.

Q: Private equity sector shifting, challenges to get to levered position?

A: Larger technology-focused private equity firms share thesis, aperture wide, expect to benefit from others pulling back.

Q: Bifurcation of repurchasing stocks or reinvesting into other sectors?

A: Evaluate incremental investment opportunity vs buying stock, will do both within regulatory restrictions.

Q: Mark-to-market portfolio LTV and SpaceX investment valuation?

A: SpaceX position marked at around $720 billion, portfolio LTV has margin of safety.

Q: Software defaults in aggregate?

A: Almost nonexistent, only one default worked through.

Q: ARR structures and unit economics?

A: ARR percentage has come down, ASPs strong, NRR has slowed but no major deterioration broadly.