Runway Growth Finance (NASDAQ:RWAY) Posts Earnings Results, Misses Estimates By $0.02 EPS

Runway Growth Finance (NASDAQ:RWAY) posted its earnings results on Thursday. The company reported $0.29 earnings per share for the quarter, missing the consensus estimate of $0.31 by ($0.02), Zacks reports. The business had revenue of $29.45 million for the quarter, compared to analysts’ expectations of $29.47 million. Runway Growth Finance had a positive return on equity of 10.57% and a negative net margin of 2.00%.

Here are the key takeaways from Runway Growth Finance’s conference call:

• Closed the SWK acquisition (closed April 6), creating a pro forma portfolio of ~$1.1B, increasing healthcare to ~32% of the portfolio, reducing top‑10 concentration from 54% to 43%, and management expects the deal to be accretive to EPS (partially in Q2, fully in Q3).
• Senior leadership moves — JD Tamas hired for healthcare, Avisha Khubani promoted to Chief Credit Officer, Tom Raterman shifting to Vice Chairman, and Carmela Thomson named CFO — intended to strengthen origination, credit discipline, and financial operations.
• Q1 results showed total investment income of $29.5M and NII of $10.6M while NAV per share declined to $12.13 (down 9.6% q/q) and pro forma NAV after SWK was $11.93, reflecting about $7.7M of transaction costs and a decline in net assets to $438.2M.
• Credit deterioration in two positions — Marley Spoon and Blueshift moved to non‑accrual, lifting the weighted average risk rating to 2.67 and expected to reduce Q2 earnings by roughly $0.06 per share, though management emphasizes overall credit metrics remain stable.
• Board declared a $0.33/qtr distribution and launched a $15M share repurchase program, while liquidity stands at $372.3M with $370M borrowing capacity, though pro forma leverage rose to ~1.2 and available liquidity fell to ~$231.8M after the SWK close.

Runway Growth Finance Trading Down 4.2%

Shares of RWAY stock traded down $0.29 during mid-day trading on Friday, reaching $6.54. The company’s stock had a trading volume of 1,622,667 shares, compared to its average volume of 703,403. The company has a quick ratio of 1.05, a current ratio of 1.05 and a debt-to-equity ratio of 0.93. The firm has a market capitalization of $277.75 million, a PE ratio of -72.67 and a beta of 0.64. The company’s 50 day simple moving average is $7.00 and its 200-day simple moving average is $8.43. Runway Growth Finance has a 12-month low of $6.36 and a 12-month high of $11.40.

Runway Growth Finance Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, June 2nd. Stockholders of record on Monday, May 18th will be given a $0.33 dividend. The ex-dividend date of this dividend is Monday, May 18th. This represents a $1.32 annualized dividend and a dividend yield of 20.2%. Runway Growth Finance’s dividend payout ratio is presently 143.48%.

Institutional Trading of Runway Growth Finance

Several large investors have recently added to or reduced their stakes in RWAY. North Ground Capital lifted its stake in shares of Runway Growth Finance by 102.5% during the fourth quarter. North Ground Capital now owns 1,569,050 shares of the company’s stock worth $14,012,000 after purchasing an additional 794,050 shares in the last quarter. SBE LLC DBA Cedar Cove Wealth Partners purchased a new stake in shares of Runway Growth Finance during the 4th quarter valued at about $1,693,000. Marshall Wace LLP lifted its position in Runway Growth Finance by 52.6% during the 4th quarter. Marshall Wace LLP now owns 509,225 shares of the company’s stock worth $4,547,000 after acquiring an additional 175,468 shares in the last quarter. Bulldog Investors LLP boosted its holdings in Runway Growth Finance by 15.3% in the 4th quarter. Bulldog Investors LLP now owns 1,200,872 shares of the company’s stock worth $10,724,000 after acquiring an additional 159,588 shares during the period. Finally, Ares Management LLC grew its position in Runway Growth Finance by 26.9% in the fourth quarter. Ares Management LLC now owns 553,123 shares of the company’s stock valued at $4,939,000 after acquiring an additional 117,238 shares in the last quarter. 64.61% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

A number of research firms recently issued reports on RWAY. Zacks Research downgraded Runway Growth Finance from a “hold” rating to a “strong sell” rating in a research note on Tuesday, March 17th. B. Riley Financial decreased their price objective on Runway Growth Finance from $12.00 to $10.00 and set a “buy” rating for the company in a research report on Tuesday, March 17th. Wall Street Zen raised Runway Growth Finance from a “sell” rating to a “hold” rating in a research note on Sunday, April 26th. Wells Fargo & Company dropped their target price on shares of Runway Growth Finance from $10.00 to $7.00 and set an “equal weight” rating for the company in a report on Monday, March 16th. Finally, Weiss Ratings restated a “hold (c-)” rating on shares of Runway Growth Finance in a research report on Friday, March 27th. Two investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the stock presently has an average rating of “Hold” and an average price target of $9.00.

About Runway Growth Finance

Runway Growth Finance, Inc is a publicly traded business development company that provides customized debt and equity financing solutions to high‐growth, venture‐backed companies. The firm specializes in structuring senior secured loans, unitranche facilities, second‐lien financings, convertible notes and equity co‐investments designed to extend the cash runway for late‐stage companies. Runway’s flexible capital offerings are aimed at supporting technology, life sciences and other innovation‐driven sectors as they pursue growth initiatives and prepare for liquidity events.

Originally launched in 2017 under the name Saratoga Investment Corp., the company rebranded as Runway Growth Finance in 2020 following the acquisition of an established middle‐market credit manager.