SuRo Capital Corp. Q3 FY2025 earnings call

• Focused on AI infrastructure, early investments in CoreWeave, OpenAI, VAST Data proved transformative. - OpenAI completed restructuring for better transparency and public market participation, potential IPO valuation high. - CoreWeave is largest single investment, monetized part of position from CW Opportunity 2 LP but still holds significant stake. - Invested $5 million in HL Digital Assets, Inc. in September, HYPE saw increased attention and trading volume. - WHOOP expanded health business, Canva had strong financial performance, Liquid Death continued expansion. - Board declared dividend, extended share repurchase authorization, approved repurchase of 6% notes to optimize capital structure.

AI Infrastructure and Foundational Models: OpenAI completed a major restructuring in October, positioning it for public markets with potential $1 trillion IPO, which could make SuRo Capital's exposure to OpenAI represent roughly 1/3 of net assets on a pro forma basis. CoreWeave remains a large position, with fair value of investments as of 9/30 about $37 million, and monetization from CW Opportunity 2 LP. HL Digital Assets, Inc. was invested $5 million in September, holding HYPE, the token of Hyperliquid. Consumer and Fintech Portfolio: WHOOP launched Advanced Labs, Canva has ~$3.3 billion annual recurring revenue and over 240 million monthly active subscribers, Liquid Death made a follow-on investment and launched new sparkling energy line.

• Expect to declare and pay additional dividends in fourth quarter or early 2026. - Extended discretionary note repurchase program to repurchase up to $40 million of 6% notes due 2026. - Extended share repurchase authorization, providing flexibility to buy back shares opportunistically.

• Market volatility may detrimentally impact business, portfolio companies, industry and global economy, causing actual results to differ from forward-looking statements. - Geopolitical uncertainty poses risks.

Q: So just a few questions on a couple of your largest investments. So on CoreWeave, it looks like you sold another $7 million thus far in the fourth quarter. What's the remaining fair value on that investment as it stands today? And then is there a way to think about the time line around monetizing the rest of CoreWeave? And then just on WHOOP, it's great to see this got marked up again. Fair value is approaching $30 million. You've probably made 2.5x plus on your investment. So what's been driving the strong outperformance here in the markups? And then is there any way to think about a potential IPO of that company?

A: Great questions, Brian. Thank you. Let me -- WHOOP is -- we'll do first. WHOOP continues to perform quite well in all metrics. WHOOP also trades fairly actively in secondary markets. So it's their increased positive performance in their financial performance as well as some of the other trading in the company, have led to valuation changes. As far as an IPO in WHOOP, I don't know when they would IPO or when they would raise another round of capital. In respect to CoreWeave, the fair value of our investments as of 9/30 is about $37 million. And this has been monetized over time by the manager of the CW Opportunity Fund, and their monetizations can be tracked by their Form 4 filings. Thank you. And thank you for your support, Brian.

Q: Maybe just a couple on, I guess, under the topic of portfolio management here. But as you -- as the CoreWeave position gets sold down, what's sort of the way you'd like to manage the portfolio in terms of your AI exposure? I mean now that WHOOP could potentially be like -- well, it wouldn't be given where OpenAI is prospectively going to be marked at. But just aggregating all of your AI compute and data and infrastructure investments, is there a thinking that you'd like to keep that as the majority of the portfolio or anything like that? Just curious how we should kind of think about deploying additional capital into the AI space.

A: Thanks, Marvin. And again, thanks for your ongoing interest and support. You're correct. Our ongoing monetization of side of CoreWeave outside of the equation, obviously, the increased value of OpenAI and what that could look like at $500 billion or now the talked about $1 trillion would make the size of that investment way disproportionate in our portfolio. We continue to spend a lot of time in AI infrastructure space, in the application area, in the AI overlay over -- in existing software companies, and we will continue to do so. I think some of the other areas that we are spending time are in the cybersecurity area, where we find that there's a lot of interesting companies that have increased in value, but probably not at the rate of some of the AI companies. So hopefully, that answers your question.