Trinity Capital Inc. Q2 FY2025 earnings call

• Strong Q2 highlights: Delivered $34.8 million net investment income (+30% vs Q2 2024), net asset value grew 11% QoQ to $924 million, platform AUM >$2.3 billion. • Credit quality: Nonaccruals <1% of portfolio. • Milestones: Received investment-grade rating from Moody's in May and greenlight letter from SBA in June to launch an SBIC fund (potentially $275 million investable capital). • Performance metrics: Return on equity and effective yield top in BDC space; NAV up 36% YoY; TRIN stock cumulative return 88% since IPO 4 years ago. • Culture: Built on 6 core pillars—humility, trust, integrity, uncommon care, continuous learning, entrepreneurial spirit. • Capital raises: Raised $82 million via equity ATM program and $125 million of unsecured notes post-quarter; co-investment vehicles provided ~$1.9 million incremental net investment income in Q2. • Portfolio composition: ~76% secured loans, 17% equipment financings, 4% equity, 2% warrants; 20 distinct industry categories, with finance and insurance at 15% of portfolio. • Portfolio activity: Portfolio companies raised over $1.3 billion in equity capital in Q2.

Trinity Capital achieved $34.8 million of net investment income in Q2 2025, a 30% increase compared to Q2 2024. Net asset value grew 11% quarter-over-quarter to a record $924 million. Platform AUM increased to over $2.3 billion. Credit quality remained strong with nonaccruals representing less than 1% of the portfolio at fair value. The company's 5 business verticals—sponsor finance, equipment finance, tech lending, asset-based lending, and life sciences—contribute to a diversified and resilient portfolio.

• H2 2025 outlook: Strong momentum continues; investment pipeline with $849 million unfunded commitments as of Q2. • SBIC fund: Expected to close this year and start deploying next year, providing $275 million investable capital. • Managed accounts: Final stages of SEC approval, expected to grow and generate new management/incentive fees. • Interest rates: Lower rates could lead to prepayments (generating additional fee income) and lower borrowing costs on credit facility/bond issuances.

• Watch list companies: Some portfolio companies on watch list, which is a combination of need for additional capital and underperformance; these are interconnected as company performance often leads to need for capital.

Q: Casey Alexander asked about tariffs driving equipment finance and the watch list.

A: Kyle Brown stated it's timing, Jerry Harder mentioned year-to-date equipment finance deployments at 26%. Ron Kundich said watch list companies are a mix of need for capital and underperformance.

Q: Doug Harter inquired about third-party capital and managed accounts.

A: Kyle Brown said managed account business is in final stages of SEC approval and expected to grow.

Q: John Hecht asked about SBIC fund details and interest rates.

A: Kyle Brown explained SBIC fund has low-cost capital (~5% fixed), Gerald Harder noted it co-invests alongside BDC.

Q: Sean-Paul Adams questioned about NextCar.

A: Ron Kundich said ongoing discussions for loan modification with NextCar.

Q: Christopher Nolan asked about tax changes and equipment finance.

A: Kyle Brown said tax changes could benefit equipment financing.

Q: Paul Johnson inquired about RIA deployment.

A: Michael Testa said RIA is ramping up, Kyle Brown noted it helps with debt-to-equity ratios