Sixth Street Specialty Lending, Inc. Q4 FY2025 earnings call

• Bo Stanley introduced Ross Bruck as Managing Director and Head of Investment Strategy. - Financial results: Q4 adjusted net investment income $0.52 per share, full-year adjusted net investment income $2.18 per share. - Discussion on software and AI: Viewed AI as leveling the playing field, focusing on durable business models with moats. - Portfolio performance: Borrowers had strong credit stats, LTV stable, LTM revenue and earnings growth. - Investment activity: Q4 commitments $242M, fundings $197M; full-year commitments $1.1B, fundings $894M. - Financial performance details by Ian: Q4 net investment income $0.53 per share, full-year $2.23; Q4 net income $0.32 per share, full-year $1.81. - Formation of Structured Credit Partners (SCP) JV, expected to be accretive to earnings.

For the fourth quarter, adjusted net investment income was $0.52 per share, with adjusted net income of $0.30 per share. For the full year 2025, adjusted net investment income per share was $2.18, representing an operating return on equity of 12.7%. The portfolio had a weighted average LTV of approximately 41% as of year end, with core portfolio companies showing LTM revenue growth of ~9% and earnings growth of ~12%. The software exposure (mapped) was ~40% of total portfolio by fair value, with credit stats consistent with overall portfolio.

• Anticipate 2026 return on equity on net investment income to be 11% to 11.5%, corresponding to adjusted net investment income per share range of $1.87 to $1.95. - Base dividend framework established using forward interest rate curve; JV returns expected to support earnings profile.

• Market volatility and uncertainty; potential capital reallocation away from non-performing managers. - Credit spreads could widen, impacting portfolio valuations. - Software sector disruption could lead to winners and losers, affecting portfolio credit quality.

Q: How much of the portfolio has turned over since 2022 and mix of loan origination years?

A: Less than 20-25% of NAV is pre-2022; majority originated in 2023-2024.

Q: Motivations for SCP JV?

A: Must be accretive to shareholders and overlay with core competencies; fee-free CLO equity provides attractive risk return.

Q: Spread expectations for 2026?

A: Expect spreads to remain stable, not increasing significantly; base case is credit spreads stable with gradual market rebalancing.