Trinity Capital Inc. Q3 FY2025 earnings call

• Strong Q3 results: Delivered $37 million in net investment income, 29% y-o-y increase; net asset value grew 8% Q-o-Q to $998 million; platform AUM up 28% y-o-y. • Credit quality: Nonaccruals at 1% of the portfolio at fair value. • Dividend: Distributed $0.51 per share, 23rd consecutive quarter of consistent dividend. • Funding and investment pipeline: Funded $471 million in Q3, year-to-date investments $1.1 billion; investment pipeline robust with $773 million of new commitments in Q3 and $1.2 billion in total unfunded commitments as of quarter end. • Private credit space: Rate cuts have limited impact due to majority of loans having interest rate floors; PIK income is nominal. • Capital raises: Raised $83 million of equity through ATM program in Q3; closed new joint venture; converted vehicle into private BDC; in process of raising outside capital for third SBIC fund. • Managed funds business: Funds managed by wholly owned RIA generate new income above interest and equity returns. • Diversified verticals: 5 complementary business verticals (sponsor finance, equipment finance, tech lending, asset-based lending, life sciences) for diversified portfolio. • Culture: Focus on humility, trust, integrity, uncommon care, and continuous learning to attract and retain talent.

Trinity Capital delivered $37 million in net investment income in Q3 2025, a 29% increase from Q3 2024. Net asset value grew 8% quarter-over-quarter to a record $998 million. Platform AUM increased to more than $2.6 billion, up 28% year-over-year. Nonaccruals were 1% of the portfolio at fair value. The company distributed a third quarter cash dividend of $0.51 per share, marking the 23rd consecutive quarter of a consistent dividend.

• Plan to grow off-balance sheet vehicles and continue scaling the managed funds business. • Long-term plan to lower leverage ratio over time by generating new income via the RIA and having liquidity from off-balance sheet activity. • Continue to be opportunistic with capital deployment based on high conviction opportunities in the robust investment pipeline.

• Market risks related to changes in interest rates and economic conditions. • Credit risks associated with the portfolio, though nonaccruals are low currently. • Impact of rate cuts on income potentially being more significant if more rate cuts occur beyond the current muted impact. • Risks related to the success of managed funds and co-investment vehicles, including potential challenges in deploying capital and generating expected returns.

Q: Casey Alexander asked about current capacity in off-balance sheet vehicles.

A: Michael Testa said they allocate based on available liquidity, with the new vehicle ramping up and other vehicles having capacity, and Kyle Brown mentioned goal is to grow it as much as possible for new income.

Q: John Hecht asked about competition in verticals and new deal spreads.

A: Kyle Brown said verticals are niche with less competition, no spread compression, and tracking to be best-in-class BDC on key KPIs.

Q: Unknown Analyst asked about increasing compensation expense.

A: Kyle Brown said it's due to hiring and team growth, including launching a team in the U.K.

Q: Paul Johnson asked about Nomad Health write-off.

A: Gerald Harder explained partial realization of debt position converted to equity, with remaining debt on nonaccrual.

Q: Finian O'Shea asked about split of capital raising and pipeline.

A: Kyle Brown said pipeline is robust, capital raising focuses on EPS, and verticals are diversified.

Q: Sean-Paul Adams asked about portfolio health changes.

A: Gerald Harder said watch list credits dropped, with some credits moving up and down but overall portfolio health strong.

Q: Christopher Nolan asked about leverage ratio plan and off-balance sheet vehicles.

A: Kyle Brown said plan is to lower leverage ratio over time using off-balance sheet growth, and off-balance sheet vehicles are for fund management generating new income with little equity involvement.